Only a short time after Apple declared price hikes across its hardware offerings, Microsoft announced that its Xbox game consoles will also see price increases. Alongside this, the company revealed the discontinuation of its 2TB model.

Effective August 1, prices for Xbox consoles will rise globally. The cost of the 512GB models will go up by $100, while the 1TB variants will increase by $150. 

The pricing adjustments are detailed as follows: 

• Xbox Series S 512GB is rising from $399 to $499.
• Xbox Series S 1TB is increasing from $449 to $599.
• Xbox Series X 1TB Digital is going up from $599 to $750.
• Xbox Series X 1TB Disc is climbing from $649 to $800.

According to the company, these increases are propelled by escalating costs of memory and console storage, which are currently more than 2.5 times higher than previous figures. Microsoft cautioned that these prices might potentially double by fall 2027. This change comes less than a year after the company raised Xbox prices in the U.S. last October.

This announcement follows Apple’s own series of price increases affecting products like Macs and iPads. Apple referenced the same industry-wide pressures, indicating the surging costs of memory and storage driven by unmatched demand for AI infrastructure and data centers.

Taken together, these sequential announcements highlight the significant impact of the AI surge on the pricing of daily electronics. As tech companies heavily invest in expansive AI systems, the demand for advanced memory and storage chips has surged, constraining supply chains and elevating costs across the industry.

Microsoft sought to cushion the impact by emphasizing financing options and plans to broaden access to more affordable hardware. In its announcement, the company stated it is “developing new programs to offer pre-owned consoles at reduced prices.”

Customers acquiring qualifying Xbox hardware through Microsoft Stores will gain improved access to buy now, pay later programs, while Amazon buyers can be eligible for up to 12 months of 0% APR financing on qualifying purchases.

Moreover, Microsoft now aligns with Sony in asking gamers to spend more, as the PS5 digital version has markedly risen from its launch price of $499 to $599. On the other hand, Nintendo’s price increase for the Switch 2 has been relatively modest, but the competitor may experience pressure to escalate prices further in the future.