The memory-chip shortage that pushed Apple to raise prices this week is now hitting the games console under the TV.
What's changing
Microsoft will increase Xbox console prices worldwide from August 1, it said on Xbox Wire — up $100 on 512GB models and $150 on 1TB models. In the U.S., the Series S 512GB rises to $499.99, the Series S 1TB to $599.99, the Series X digital model to $749.99 and the flagship Series X with a disc drive to $799.99, according to Video Games Chronicle. The 2TB special edition is being discontinued rather than repriced. Controllers and other accessories are unaffected.
It is the third increase in about a year and a half. Microsoft raised U.S. prices sharply in 2025 — citing tariffs and "macroeconomic conditions" — and added another $20 to $70 last October. This time the company points squarely at components.
The reason: memory costs
"Console storage and memory prices have increased by more than 2.5x," Microsoft said, "and we expect another doubling by the fall of 2027." That tracks the same AI-driven shortage rippling across the industry: surging demand for the high-bandwidth memory used in AI data centers has pulled chipmakers' capacity away from the consumer-grade DRAM and NAND flash that go into consoles, phones and PCs, driving up prices. Memory maker Micron just reported a record quarter on that demand, and Apple cited the same squeeze when it lifted Mac and iPad prices.
Consoles are unusually exposed. Manufacturers typically sell the hardware at or below cost and make their money later on games, subscriptions and licensing — so when a key input like memory spikes, there is little margin to absorb it. And because console makers buy memory in far smaller volumes than smartphone or server giants, they have less power to lock in supply at fixed prices.
What it means
To cushion the blow, Microsoft is offering interest-free "buy now, pay later" installments through its store and discounts on certified refurbished consoles. But the list prices mark a real reset: the cheapest new Xbox will cost $499.99 in August — roughly what the top-end Series X launched at in 2020. At $799.99, the flagship now sits above Sony's PlayStation 5 Pro, narrowing what had been a value edge for Microsoft in a console market where it already trails PlayStation and Nintendo.
For households, it is one more place the AI build-out is showing up on the receipt. The data centers powering chatbots and the game console in the living room are, increasingly, competing for the same chips — and for now, the data centers are winning. With Microsoft warning of another possible doubling in memory costs by late 2027, console prices may not have finished climbing.
