Xbox price increases follow Apple's hardware hikes

Microsoft revealed that Xbox game consoles are getting more expensive, just hours after Apple announced price increases across its hardware lineup. The company also announced that it's discontinuing its 2TB model. Starting August 1, Xbox console prices will increase worldwide.

The 512GB models will cost $100 more, while the 1TB versions are set to rise by $150. The company says the increases are being driven by memory and console storage prices rising, with costs more than 2.5 times higher than previous levels. Microsoft warned that these prices could double by the fall of 2027.

The move comes less than a year after the company raised Xbox prices in the U.S. last October. The announcement follows Apple's own round of price hikes affecting products such as Macs and iPads.

Apple cited the same industry-wide pressures, pointing to soaring memory and storage costs fueled by unprecedented demand for AI infrastructure and data centers. Together, the back-to-back announcements underscore how much the AI boom is impacting the price of everyday electronics. As technology companies invest heavily in larger AI systems, demand for advanced memory and storage chips has surged, tightening supply chains and pushing costs higher across the industry.

Microsoft attempted to soften the blow by highlighting financing options and plans to expand access to lower-cost hardware. In its announcement, the company said it is “working on new programs to provide previously played consoles at lower prices.” Customers purchasing eligible Xbox hardware through Microsoft Stores will have greater access to Buy Now, Pay Later programs, while Amazon shoppers can qualify for up to 12 months of 0% APR financing on eligible purchases. Additionally, Microsoft now joins Sony in asking gamers to pay more, with PS5 digital now costing significantly more than it did at launch, rising from $499 to $599.

Meanwhile, Nintendo's increase for the Switch 2 has been comparatively modest, but the rival may face pressure to raise prices further in the future. The price increases by Microsoft and Apple highlight the growing impact of AI on consumer electronics. As demand for advanced memory and storage chips continues to surge, technology companies are passing on the costs to consumers.

This trend is likely to have a ripple effect across the industry, with other companies potentially following suit. For developers and businesses, this means increased costs for hardware and potentially higher prices for consumers. For gamers, this may mean waiting longer for new console purchases or exploring alternative options.