After Apple, Microsoft raises Xbox console prices by up to Rs 14,000 as AI boom drives up chip costs

Microsoft has announced Xbox console price increases from 1 August, blaming rising storage and memory chip costs. The move comes ahead of GTA 6 and amid wider pressure on gaming hardware from AI-driven demand.

In Short

• Xbox console prices are rising globally due to soaring AI-driven chip costs
• Some Xbox models will become costlier by up to Rs 14,000 worldwide
• GTA 6 launch could further strain console supply and demand

Just after Apple increased the prices of some iPad and MacBook models, Microsoft's Xbox has announced a steep price hike for its gaming consoles. The reason isn't a new feature or a design upgrade, it's the growing AI boom. Microsoft says the cost of storage and memory chips, two of the most important components inside gaming consoles, has surged sharply because AI companies are buying huge quantities of these chips to build massive data centres. As a result, Xbox says it can no longer absorb the higher manufacturing costs.

Xbox consoles to get costlier from August 1

Starting August 1, Xbox console prices will increase by as much as $150 (around Rs 14,100) worldwide. The Xbox Series S 512GB will now cost $499.99 (around Rs 47,000), up from $399.99 (around Rs 37,600), while the 1TB version will jump from $449.99 (around Rs 42,300) to $599.99 (around Rs 56,400).

The Xbox Series X models are also getting a $150 (around Rs 14,100) price increase, and Microsoft is discontinuing the 2TB variant.

According to the company, storage and memory prices have risen by more than 2.5 times, and they could double again by 2027. Xbox says the gaming industry has been hit particularly hard by the ongoing component shortage.

GTA 6 launch could add more pressure

The timing is significant. The price hike comes just months before the highly anticipated launch of GTA 6 in November, a game expected to drive a massive surge in demand for gaming consoles. However, industry experts fear that both Microsoft and Sony could struggle to meet this demand because AI companies are consuming large amounts of the same components needed to manufacture consoles.

Microsoft isn't the only one raising prices

Microsoft isn't the only company raising prices. Sony also increased the prices of its PlayStation 5 consoles last month, following a previous price hike last year. Following Xbox's latest increase, the Xbox Series X will cost $799.99 (around Rs 75,200), compared to $649.99 (around Rs 61,100) for the standard PlayStation 5, while the PS5 Pro remains priced at $899.99 (around Rs 84,600).

A challenging time for Xbox

The latest price hike also comes at a challenging time for Microsoft's gaming business. Reports suggest Xbox is planning major layoffs and budget cuts after its push into subscription services and cloud gaming failed to offset slowing console sales and a shortage of major exclusive game releases.

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