Xbox Price Increase Shoves Series X to $799 in Cost Shock

Microsoft’s new Xbox price increase turns the budget pitch for current-generation Xbox hardware into a much harder sell. Starting August 1, 2026, 512GB Xbox models will rise by $100, while 1TB models will climb by $150, according to The Verge.

That puts the Xbox Series S at $499.99, the Xbox Series X without a disc drive at $749.99, and the Xbox Series X with a disc drive at $799.99. Microsoft is also dropping its 2TB Xbox Series X, saying it will be “sunsetting” that model as storage and memory costs keep moving against the console business.

Xbox price increase pushes Series S to $499.99 and Series X to $799.99

The core move is simple: Microsoft is asking Xbox buyers to absorb another large hardware reset less than a year after the last one. The company says the new pricing takes effect on August 1, with the increase tied directly to storage and memory costs.

Here’s the new console pricing disclosed in the source material:

Microsoft says it tried to avoid this outcome. In its own post, the company says it spent months working with suppliers after an earlier price increase.

“Last October, we increased XBOX console price by $20-$70 in the U.S. We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options.”

The company’s explanation is blunt. Microsoft says console storage and memory prices have risen by more than 2.5x, and it expects “another doubling by the fall of 2027.” That is the key line in the announcement, because it frames the Xbox price increase as a cost pass-through rather than a one-time pricing experiment.

The strongest counterpoint is that Microsoft is adding payment options at the same time. Its Xbox Wire post says it will offer Buy Now, Pay Later options through Microsoft Stores, work with partners on 0% APR financing for up to 12 months, support trade-in programs for “previously played consoles,” and continue selling Xbox Certified Refurbished Consoles at Microsoft Stores for up to US$100 off MSRP.

XOOMAR analysis: Those programs soften the sticker shock, but they don’t erase it. Financing changes the timing of the payment. It doesn’t change the new price ceiling.

Microsoft already raised Xbox prices last October, so this is no isolated tweak

This hike lands harder because Microsoft already moved Xbox pricing last fall. The company says it raised U.S. Xbox console prices by $20-$70 in October, then returned with a much steeper increase for August.

That timing matters. The Xbox Series S originally launched at $299 in November 2020, while the Xbox Series X launched at $499, according to the supplied source material. After the new increase, the least expensive listed Xbox Series S starts at $499.99, nearly the same level as the original Series X launch price.

For buyers, that changes the role of the Series S. The machine has been Microsoft’s lower-cost console entry point, but at $499.99, it no longer reads like an impulse-friendly way into Xbox hardware. It becomes a far more deliberate purchase.

The $799.99 disc-drive Series X is the sharper signal. Microsoft is not just nudging the top model higher. It is putting the flagship console into a price band where buyers are likely to scrutinize storage, disc access, subscriptions, and alternatives more closely before committing.

That does not mean demand disappears. Microsoft still points to the Series S as “the lowest-cost way for console players” to access upcoming games listed in its post, including Assassin’s Creed Black Flag Resynced, Call of Duty: Modern Warfare 4, Gears of War: E-Day, Grand Theft Auto VI, Halo: Campaign Evolved, and Madden NFL 27.

XOOMAR analysis: The price increase makes Microsoft’s affordability story depend less on MSRP and more on payment plans, refurbished units, retailer offers, and timing. For more context on how memory costs are hitting consumer hardware, see our related coverage of how AI data centers turn RAM prices against cheap new PCs, and how the earlier Xbox price increase shoved Series S into $499 shock.

Microsoft drops the 2TB Xbox Series X while storage costs drive the story

The 2TB Xbox Series X is being removed just as storage becomes one of the most expensive parts of the pitch. Microsoft says it will be “sunsetting” the 2TB model, tightening the lineup while raising prices on remaining hardware.

That is a meaningful cut because storage is not a cosmetic spec for current console buyers. Microsoft’s own explanation centers on storage and memory, and its 2TB model was the highest-capacity Xbox Series X option named in the source material. Removing it narrows the official path for players who want more built-in room.

The company has not said in the supplied material exactly how long the 2TB model will remain available, whether existing inventory will be discounted, or whether another high-storage Xbox configuration will replace it later. The public rationale points to component costs and supplier talks, but Microsoft has not provided a model-by-model cost breakdown.

That leaves a tension in the announcement. Microsoft says consoles are especially exposed because, unlike phones, computers, speakers, and other consumer devices, they are “typically not sold at a profit, but instead for less than they cost to make.” If that economics problem is getting worse, cutting the highest-storage Xbox makes strategic sense. It also leaves heavy digital buyers with fewer official choices.

The counterpoint is Microsoft’s refurbished and previously played console plan. If those programs develop quickly, buyers could see lower-priced hardware outside the new-console lineup. But Microsoft has described those programs broadly, and payment options vary by region, with credit provided by third parties and subject to eligibility.

Retailers, financing plans, and August 1 stock now become the live questions

The next practical question is whether shoppers see any relief before the new Xbox price increase takes effect. Microsoft set a clear deadline: August 1, 2026. Anyone considering an Xbox purchase has a short window to look for current pricing, assuming stock remains available.

Retailers could become the pressure valve, but the source material does not say whether they will absorb any of the increase through promotions, bundles, or discounts. Microsoft’s confirmed response is narrower: financing, Buy Now, Pay Later, previously played consoles, and certified refurbished units.

The timing also puts the new prices in place before the year’s major gaming sales cycle. XOOMAR analysis: that makes retailer behavior especially important. If stores keep pricing close to Microsoft’s new levels, the higher MSRP becomes the new baseline. If promotions appear quickly, buyers may treat the posted prices as a ceiling rather than the real market price.

A second watch item is Microsoft’s broader Xbox messaging. Higher console prices make Game Pass, cloud access, refurbished hardware, and future device plans more important to how Xbox defends its value. The facts available today show Microsoft raising prices and narrowing hardware options. What would change the read is clear evidence that financing, used consoles, or retail discounts meaningfully offset the August 1 jump for buyers.

The Bottom Line

• The Xbox Series S is losing much of its budget-console appeal at $499.99.
• Microsoft is blaming storage and memory costs that have risen by more than 2.5x.
• The 2TB Xbox Series X is being discontinued as hardware economics get tougher.