Microsoft hikes Xbox console prices due to rising costs
Source: cnbc ·
Microsoft has followed Apple's lead in raising prices for its Xbox consoles, citing a sharp increase in component costs.
Key takeaways
- Microsoft increased Xbox console prices due to soaring component costs.
- Xbox Series S consoles now cost $500 with 512GB storage, up from $400.
- Xbox Series X consoles now start at $750, up from $650.
- Microsoft expects console storage and memory prices to double by fall 2027.
- Memory manufacturers are prioritizing high-bandwidth memory for AI infrastructure.
Why it matters
The price increases in the consumer electronics industry, led by Apple and Microsoft, will have significant implications for the market and consumers. As component costs continue to rise, companies may be forced to pass on the costs to consumers, leading to higher prices and potentially reduced demand. This could have a ripple effect across the industry, impacting companies that rely on consumer electronics for revenue.
What to watch
- Microsoft's next earnings report, expected in July 2026, may provide more insight into the company's component costs and pricing strategy.
- The impact of the component crisis on the consumer electronics industry, particularly on consoles, will be closely watched in the coming months.
- Microsoft's decision to discontinue the 2 TB Xbox Series X model may indicate a shift in the company's product strategy.