Xbox prices jump 43% as Microsoft blames chip costs

Microsoft has raised Xbox prices for the second time in under a year, and this round hits UK buyers hardest of all.

The premium Series X with a disc drive now costs £670 in the UK, up from £500. A baseline Series S has jumped from £300 to £430, a 43% increase on a console originally released six years ago.

US buyers saw smaller relative jumps, with entry-level consoles rising $100 to $499 and higher-memory models up $150 to $749, while EU Series S prices with extra storage climbed roughly €200.

The company said console storage and memory prices have risen more than 2.5 times, with another doubling possible by autumn 2027. Consoles are typically sold at a loss rather than a profit, unlike phones or laptops, which leaves Microsoft less room to absorb rising component costs without passing them on.

Microsoft had said in June it "hoped another price increase would not be necessary" after already raising US prices last October.

RAM, once a cheap commodity component, has surged in price largely due to demand from AI infrastructure, and graphics card costs have followed a similar trajectory.

Microsoft has budgeted some $190 billion of its own spending for 2026, much of it AI-related, the company having previously said that about $25 billion of its extra spending was due to higher prices of memory and computer chips.

The company is apparently negotiating long-term memory supply contracts that will give it an advantage over console manufacture in acquiring chips. In other words, Microsoft is a victim of the situation but at the same time also a perpetrator.

Sony increased its PlayStation 5 prices by £90 in March, while Valve’s Steam Machine was launched at a significantly higher price than expected because of the same reason. The reaction is already quite strong; a Windows Central editor recently warned that "this isn't even the ceiling".