Microsoft will raise Xbox prices by $100 to $150 from August 1, blaming a component-cost surge fueled by artificial intelligence demand. In the United States, the Xbox Series S will increase to $500, and the Series X will increase to as much as $800. The 2 terabyte model will be discontinued. This is the third price increase for Xbox after a worldwide hike in May 2025 and a second, limited to the United States, in October. The accelerated construction of data centers for AI has sent the cost of memory and storage chips soaring, with costs more than doubled and expected to double again by late 2027. Microsoft noted that consoles are typically sold for less than they cost to make. Sony raised the price of its PlayStation 5 by 100 euros in Europe in early April, and Nintendo announced an increase of more than 6% as of September 1 for its Switch 2. Microsoft’s gaming division accounted for about 8% of its revenue in its fiscal year 2025 and underwent a major restructuring in February amid declining revenue.