Price Increase Announcement
Microsoft announced that, effective August 1 2026, the price of its Xbox 512 GB console will rise by $100 and the 1 TB model by $150. The company will also discontinue the 2 TB Xbox model.
Background on Cost Pressures
The latest adjustment follows a prior increase of $20 to $70 in the United States that took place last October. Microsoft attributed the hikes to a more than 2.5‑fold rise in storage and memory component costs and warned that these costs are expected to double again by the fall of 2027. The firm noted that, unlike phones and computers, Xbox consoles are typically sold for less than their production cost.
Financing Options
To mitigate the impact on consumers, Microsoft will introduce a Buy‑Now‑Pay‑Later (BNPL) scheme for eligible Xbox hardware purchased through Microsoft Stores, allowing customers to split payments into short‑term, interest‑free installments. Additionally, customers buying eligible Xbox hardware on Amazon will be able to access 0% APR financing for up to 12 months.
Trade‑In and Refurbishment Programs
Microsoft is collaborating with retail partners to launch programs that will offer previously owned consoles at reduced prices. Consumers can trade in their consoles with participating retailers for cash or store credit, after which the units will be resold at lower price points. Xbox Certified Refurbished consoles are available at Microsoft Stores with discounts of up to $100 off the manufacturer’s suggested retail price.
Product Positioning
The Xbox Series S continues to be positioned as the most affordable entry point for gamers, providing access to titles such as 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.