XBOX Raises Console Prices For Second Time in 12 Months

After hinting at challenging economic conditions over the past month-plus, XBOX is raising the price of its consoles beginning on August 1st, 2026.

This is the second time that the company has raised prices of their consoles, doing so back in October by $20 to $70. Come August 1st, the price of a 512 GB XBOX console will increase by US$100, and US$150 for 1 TB consoles.

XBOX made a statement on its website about why this price hike had to be done.

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

They also pointed out to the fact that the entire consumer electronics industry is struggling, but game consoles are hit hardest. "Unlike phones, computers, speakers, and other consumer devices, consoles are typically not sold at a profit, but instead for less than they cost to make."

Today's news also confirms that they will use Buy Now, Pay Later for eligible XBOX hardware purchases at Microsoft Stores.

XBOX Hasn't Been the Only Company to Raise Console Prices

To be fair for a second, Microsoft and XBOX aren't the only companies out here issuing price hikes.

Valve announced that their upcoming Steam Machine will start at a whopping $1049 for its 512GB version, and that's without a controller! Then there's the fact that Grand Theft Auto 6 will release at $79.99 for its base edition and $99.99 for the Ultimate Edition.

Then there was a price increase for the Nintendo Switch 2, as well as one for the PlayStation 5. There's plenty to be upset with XBOX over, such as their current ongoing layoffs. Having said that, and I don't mean to defend the multi-billion dollar company here, but there are indeed other factors at play here that are resulting in these hardware price increases.

With the continued push on AI and data centers, the cost of hardware has been a very hot-button topic. We know that GPU prices were going to rise "significantly" this year, and it's been happening in front of our very eyes.

Don't Expect New Consoles Anytime Soon

If there's one big takeaway I have from this news, it's that XBOX is expecting hardware costs to double again next year.

That's a tough pill for anyone to swallow for anyone looking to buy new hardware, whether it's a game console, computer, or laptop. I've had friends scramble to buy a Switch 2 before the price increase happens, for example. Myself, I need a new laptop badly, plus I'd love to pick up a gaming handheld. However, the current prices are, well, you know, rough. Knowing that they're likely to get worse is something I'm not looking forward to.

I imagine it's something Microsoft and Sony aren't looking forward to either, as we're approaching six years since the launch of the PlayStation 5 and Xbox Series X|S. Traditionally, this is when we'd start to learn more and more about their next consoles that could release as soon as 2027.

Having said that, given that people aren't excited about paying these premium prices for consoles today, I can't imagine they'll be thrilled either about paying even more money for a game console that will likely not have an exclusive game line-up that makes it worth purchasing. The last generation saw games released on the Xbox One and PS4 for years, and given how much new consoles will cost, I don't expect that to change when a PS6 or Xbox Series, whatever they want to call it. As such, what's the point of releasing overpriced hardware that no one will buy?

We'll see if anything changes soon, but for now, I'm not holding my breath.