Xbox Series X Price Hike Sparks Massive Fan Backlash

Microsoft confirms steep global price increases for Xbox Series X and Series S consoles, citing rising component costs, while gamers question the company's strategy ahead of major game launches.

Microsoft has increased the prices of its Xbox Series X and Series S consoles globally by a huge margin. There was another major change in the game industry.  The new costs, which go into effect on August 1, are one of the largest price hikes for a mid-generation system in recent memory, and players are already very furious about it.

Microsoft has announced that the 2TB Xbox Series X is being discontinued, and prices are rising as well. The company claimed it made the decision due to a worldwide shortage of parts that has made manufacturing far more expensive, notably for memory and storage chips for consoles.

Xbox consoles have already gone up by $20-$70 in the US since October last year, Microsoft stated.

Executives had believed they wouldn't have to make any additional hikes, but after months of conversations with suppliers, rising production costs couldn't be halted. Prices of storage and memory components have risen more than 2.5 times their previous levels, and prices are expected to rise further by the end of 2027, the business stated.

Microsoft also noted there are still supply chain concerns in the consumer electronics market overall. But they say gaming systems get hit particularly hard because they often sell at very low profit margins, or none at all. Unlike smartphones, laptops, TVs, and many other electrical devices, gaming consoles generally sell for less than it costs to produce them, so more people will buy them, and Microsoft can earn money from software, subscriptions, and accessories, Microsoft claims.

With the cost of creating the product continuing to rise, it is becoming increasingly difficult to keep pricing the same, the company said. To help offset the impact of price increases, Team Xbox has shared several initiatives to make its hardware more affordable. For example, the Microsoft Store now offers more “Buy Now, Pay Later” financing options that let customers spread payments into short-term, interest-free installments.

Amazon offers financing solutions on select Xbox systems with 0% APR for up to 12 months when purchasing from the retailer. That means purchasers have greater flexibility in deciding how much to spend on a new device.

Microsoft is also collaborating with retailers to expand trade-in programs.

If they have an old Xbox console lying around, they can trade it in for cash or store credit. The refurbished systems will subsequently be sold to new clients at discounted costs. Another is Microsoft's Certified Refurbished program. That allows Microsoft Stores to offer professionally refurbished Xbox consoles for up to $100 cheaper than the cost of a brand-new system.

But even with these programs, many gamers are unsure whether the savings are enough to offset the big price hikes in stores. The new pricing mechanism in the US means the Xbox Series S will cost $500, while the 1TB model will cost $600. The regular Xbox Series X with a disc drive and 1TB is now $800, and the Xbox Series X Digital Edition is now $700.

For folks who have owned it for a long time, the price increases are a major change compared to when the Xbox originally came out. The base Xbox Series X launched in 2020 at $499, so its price has increased by about $300. Meanwhile, the Xbox Series S, which launched at $299, will suddenly be selling for around double that.

The announcement has sparked heated debate in the game community, with many wondering whether such large price hikes were necessary. That’s a choice as people look ahead to the release of popular games like Grand Theft Auto VI and as competitors face substantial industry shakeups.

There is significant resistance to raising console prices in the second half of this hardware generation.

They argue that this could make it more difficult to attract new participants, particularly as pricing has become a greater concern for consumers. Microsoft cited growing component costs and persistent supply chain constraints as the reason for the decision. But the announcement has sparked a new discussion regarding the future viability of traditional console pricing methods.

With higher costs coming into effect worldwide, it remains to be seen whether financing plans, refurbished hardware, and trade-in programs will be sufficient to assuage consumer anxieties.