Microsoft increases the price of its Xbox gaming consoles for the third time recently all around the world, discontinues its high-storage capacity model, and informs that the cost of storage and memory has increased by 2.5 times and is set to double by the fall of 2027.
The Xbox department at Microsoft hit consumers with a one-two-three punch on Wednesday in the form of a price hike effective August 1, the discontinuation of their 2TB console line, and the threat that memory prices will go up once again to double their current rates by 2027. This price hike for the Xbox system in August 2026 amounts to $150 per unit based on storage type the third time that the Xbox has raised prices in recent periods all of which comes after the company announced Apple’s price increases for their MacBooks and iPads.
What the Xbox price hike August 2026 actually costs gamers
| Xbox Model | Storage | Price Change | Effective |
|---|---|---|---|
| Xbox (entry model) | 512 GB | +$100 | August 1, 2026 |
| Xbox (standard model) | 1 TB | +$150 | August 1, 2026 |
| Xbox (top model) | 2 TB | Discontinued | Immediately |
The decision to discontinue the 2TB version amplifies the cost effect on those customers looking for the most storage, since they will not only pay a higher price for the 1TB version but also forego their chance to purchase additional storage altogether. As Xbox has admitted, storage and memory costs have increased more than 2.5 times, with the company expecting them to double again by the fall of 2027.
“Console storage and memory prices have increased by more than 2.5 times and we expect another doubling by the fall of 2027.” — Xbox statement
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The third Xbox price increase after two years of tariff and cost pressures
With the third Xbox price increase coming just a couple of weeks after two price increases in a single year due to tariff pressures, tough competition from PlayStation and PC gaming, and uncertain consumer purchasing power, it is clear that the Xbox price increase announced on Wednesday was made due to yet another issue, not just some temporary challenge that could be overcome.
Layoffs and cuts in budget are also seen at Microsoft
The price rise is not happening in isolation. According to a report from Bloomberg just last month, there will be large scale layoffs within the Xbox department in the coming month of July, along with major cuts to budgets for marketing and other activities – all of which seem to indicate that Microsoft sees this phase for the gaming division as a period of contraction and not expansion.
Sony has done so, too; the console market reprices in tandem.
The Xbox price increase for August 2026 is preceded by the Sony PS5 price increase starting from April, following another price increase in August 2025. The reason given by both companies is the same: DRAM prices have increased due to the construction of AI data centers having monopolized the memory manufacturers’ capacities.
- Xbox: +$100 to +$150 from August 1, 2026. 2TB model discontinued. Third price hike in recent period.
- PlayStation: PS5 price raised April 2026, following a prior increase in August 2025.
- Apple: MacBook Air, MacBook Pro, and iPad Air all raised June 25, 2026. iPhone hike expected in autumn.
Why this is getting progressively worse before it gets better
The warning from Xbox that memory costs are going to double again in 2027 highlights that the current issue is a structural one spanning several years and not just a temporary spike. Investments into AI infrastructure keep outpacing investments into production capacity for memory chips, and supply deals between Nvidia, Micron, and others tie up the available supply far ahead of time. For those gamers looking at the Xbox price increase in August 2026 and wondering when console prices will normalize, Xbox has their own forecast for that.
Nayab Fatima is a university graduate and an emerging media professional with a strong passion for journalism, research, and independent reporting. She specializes in developing well-researched, fact-based, and analytical news stories covering a wide range of sectors, with particular expertise in technology, telecommunications, aviation, and the automobile industry.
