Microsoft has announced that it will increase Xbox console prices worldwide from August 1, 2026, citing rising component costs and ongoing challenges affecting the consumer electronics industry.
Under the new pricing structure, 512 GB Xbox consoles will increase by $100, while 1 TB models will see a $150 price increase. Microsoft also confirmed it is discontinuing the 2 TB console model, which will no longer be sold.
The company said the decision follows a previous price increase introduced in the United States last October, when Xbox console prices rose by between $20 and $70. According to Microsoft, it had hoped to avoid another adjustment but said the cost of console storage and memory has risen by more than 2.5 times, with prices expected to increase further by the end of 2027.
Microsoft noted that the wider consumer electronics sector continues to face supply challenges, but said the impact has been particularly significant for game consoles, which are typically sold at or below manufacturing cost rather than generating profit on the hardware itself.
Alongside the price increase, Microsoft announced several initiatives aimed at making Xbox consoles more affordable for customers.
Players purchasing eligible hardware through the Microsoft Store will have access to expanded Buy Now, Pay Later options, allowing purchases to be split into short-term interest-free instalments.
Eligible Xbox hardware bought through Amazon will also qualify for 0% APR financing for up to 12 months, giving customers another payment option.
Microsoft is also working with retail partners on a new previously played console programme, allowing players to trade in their existing Xbox consoles for cash or store credit. Those traded-in systems will then be resold at lower prices to other customers.
In addition, Xbox Certified Refurbished Consoles remain available through Microsoft Stores at discounts of up to $100 below the recommended retail price.
Despite the higher hardware prices, Microsoft said the Xbox Series S will continue to serve as the company’s most affordable current-generation console. It highlighted several upcoming releases available on the platform, 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.
