Xbox Prices Climb Again
Xbox Prices Increase by Up To $150; Microsoft Discontinues 2TB Model Amid Component Crisis
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Key Points
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The 512GB Xbox Series S price has been set at $499.99 as of the August 1, 2026 hike.
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The 1TB Xbox Series S price climbs to $599.99.
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The Xbox Series X pricing now lists the non-disc version at $749.99 and the disc-drive version at $799.99.
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Microsoft is sunsetting the 2TB Xbox Series X/S model, having previously carried an $800 price tag.
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This price move marks the third Xbox price increase since 2025, following earlier changes in May 2025 and October 2025.
Microsoft is raising Xbox console prices by $100 to $150, effective August 1, 2026 — the third price hike since 2025. MarketWatch reports the increase hits 512GB models with a $100 jump and 1TB models with a $150 jump. The entry-level Xbox Series S will now cost $499.99, while the flagship Series X Disc version climbs to $799.99.
At the same time, Microsoft is killing off the 2TB Xbox Series X model entirely. The company blames a "persistent components crisis," saying memory and storage costs have risen more than 2.5 times since early 2025, according to CNBC. Microsoft expects those costs to double again by fall 2027.
Three Price Hikes in 13 Months Push Xbox to $800
Xbox launched in November 2020 with the Series X at $499.99 and the Series S at $299.99. Since then, prices have climbed in three steps. A May 2025 hike added $80 to $100 across models. A second increase in October 2025 tacked on another $20 to $70. Now the August 2026 hike adds the biggest jump yet, according to Shacknews.
The total increase for the Series X Disc version is now $300 — a 60% rise from its launch price. The Series S, once the affordable $299.99 option, now costs $499.99. That is the same price the Series X sold for when it first launched in 2020.
AI Chip Demand Is Squeezing Gaming Console Supply
Microsoft points to the rapid growth of AI data centers as the root cause. AI systems need enormous amounts of high-bandwidth memory. That demand is pulling the same chips away from consumer devices like game consoles. Gamereactor notes Microsoft says storage and memory costs have surged more than 2.5 times since early 2025.
The 2TB model is being cut entirely. Analysts believe Microsoft dropped it to avoid the optics of a $1,000 console, which is where the $150 increase would have placed it. Apple announced similar price hikes for MacBooks and iPads on the same day, pointing to the same industry-wide shortage.
Microsoft Rolls Out Financing to Soften the Blow
To ease the sting, Microsoft is offering Buy Now, Pay Later options and 0% interest financing for up to 12 months through Amazon. Retailers like Walmart are also being tapped to offer "Previously Played" and refurbished consoles at lower prices. Microsoft is also running trade-in programs that give cash or store credit for old consoles, according to The Gamer.
Still, consumer reaction has been sharp. On Reddit and gaming forums, users called the $800 price point "insane" and "depressing." Some shoppers are rushing to buy existing stock before August 1. Walmart clearance units have been spotted at around $573, well below the incoming price floor.
Xbox Now Costs More Than a PlayStation 5
The new Xbox pricing puts Microsoft above its main rival. Sony's PS5 disc version currently sells for $649.99. The cheapest new Xbox disc console will now cost $799.99 — $150 more. The digital Xbox Series X comes in at $749.99, still $100 above the PS5, according to CNBC.
Microsoft is pushing hard toward its digital ecosystem and Game Pass subscription service. By pricing the disc version $50 higher than the digital version, it nudges buyers away from physical games. With entry-level gaming hardware now at $499.99 and top-tier games reportedly heading toward $80, the cost of getting into console gaming is reaching record highs.
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