'The entire consumer electronics industry is struggling': Xbox says it's hiking prices to offset the AI-driven 'components crisis'

It’s tough to be a maker of consumer electronics — especially this year. As the AI bubble grows, and the data centers powering the exciting tech gobble up silly amounts of water, electricity, and components like graphics cards and memory chips, even the biggest behemoths in Silicon Valley are proving that no one is immune to “RAMageddon.” On Thursday, just hours after Apple raised prices on its own products, from Macs to iPads, Microsoft also announced it, too, would have to raise prices on its Xbox gaming consoles.

“Effective August 1, 2026, we will be updating prices worldwide,” the company said in a blog post. “The price of Xbox consoles will increase by US$100 for 512 GB models and US$150 for 1 TB models. We will also be sunsetting our 2 TB model,” it said.

In the same post, Microsoft’s Xbox team acknowledged it had to raise prices on the Xbox family less than a year ago, by $20 to $70 in the U.S. It also had to raise prices in May of last year. Matthew Ball, Xbox’s chief strategy officer, said its decision to raise prices on its Game Pass subscription service lost year “shed millions of subscribers over the span of a few months.”

“We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options,” it said. “Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027.

“The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles,” the company added.

In the same breath, Microsoft announced some new ways to “make Xbox consoles more accessible,” including “Buy Now, Pay Later” options on eligible hardware, interest-free financing, and working with retail partners to create new programs to “provide previously played consoles at lower prices.”