Microsoft has announced price increases for the Xbox Series X|S family around the world, bumping them up by as much as 33% when the price hikes come into effect on 1st August, and helping to make the Steam Machine price feel marginally more reasonable.
The price of Xbox consoles will increase by $100 USD for 512GB models and $150 USD for 1TB models, while the 2TB model will be going the way of the Dreamcast and is being discontinued.
For the US, then, that makes the price matrix as follows
- Xbox Series S 512GB – $499.99 (previously $399.99)
- Xbox Series S 1TB – $599.99 (previously $449.99)
- Xbox Series X 1TB Digital – $749.99 (previously $599.99)
- Xbox Series X 1TB – $799.99 (previously $649.99)
This all follows price increases last year, and has Xbox noting their buy now, pay later plan, 0% interest financing, and discounted certified refurbished consoles as alternative ways to buy.
Echoing comments by Xbox CEO Asha Sharma in the past month, the announcement post outlines how far SSD and memory prices have increased, going up by more than 2.5x, and with the company expecting them to double again over the next 18 months. This is forcing them to rethink their plans for the next generation.
“The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles. 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.”
This is true, and component prices have increased massively over the past 18 months. Even juggernauts like Apple have been affected – MacBooks and iPads have seen a memory price-related price increase today – and Nintendo also has Switch 2 price increases set to take effect in September. Valve has been battling this situation while trying to release their Steam Machine, the eventual price being far higher than they originally planned.
Of course, this is all down to the AI bubble, which is being fed by massive server farm investments by companies such as Microsoft, and by AI specialist upstarts like OpenAI (which are backed by other tech giants, such as Microsoft). Data centres are being filled with specialised processing units which require massive amounts of RAM and flash memory capacity. Unfortunately for the Microsoft-owned Xbox, this is making it more difficult for them to make consoles.
It’s all feeling a bit like the man in the hot dog costume looking for who did this meme.
Source: Xbox
