Microsoft has just announced that the price of Xbox consoles is going up in the US as the company stares at an unprecedented industry-wide crisis. The price of the 512 GB models is going up by $100, and if you are interested in buying the 1 TB models, expect to pay $150 above the current asking price. Additionally, Microsoft is also discontinuing the 2 TB storage model, and it’s not surprising why.
What’s happening?
Microsoft notes that the industry is currently going through an unprecedented crisis where the cost of memory and storage chips has ballooned dramatically. Specifically, the company says that the average price has gone up by a factor of 2.5x, and there is not going to be any immediate respite. The company says it is expecting the costs of memory and storage chips to double once again by the end of 2027.
The decision to raise the price of Xbox consoles is not unprecedented. The company’s new chief, Asha Sharma, has recently mentioned on multiple occasions that the console hardware is proving to be an increasingly challenging value proposition in the current market situation. Microsoft won’t be the only major label to increase the price or make cost-cutting measures across its hardware portfolio.
The broader picture
Earlier today, Apple also increased the price of its Mac and iPad hardware by hundreds of dollars. Microsoft’s new Surface tablets and laptops are also pricier than ever. To bring the cost down, the company also launched cheaper models by halving the amount of RAM to just 8GB and removing the Copilot+ badge from those devices, which directly means nerfed on-device AI features.
This won’t be the first price hike for Xbox consoles in recent times. Back in October, Microsoft raised the price of its gaming console by around $70 in the US. The situation is not too different for rival players in the market. The costs of gaming laptops have gone up significantly. Even Valve’s highly anticipated Steam machine landed in the market carrying a sticker price of around $1,049 in the US.
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