Microsoft said it will increase Xbox console prices worldwide on Aug. 1, 2026, pushing 512 GB models up by $100 and 1 TB models up by $150. The company also said it will discontinue the 2 TB Xbox model.
The move matters for anyone still waiting to buy into the current Xbox hardware generation, especially players looking at higher-storage configurations. Storage is not a cosmetic upgrade on a modern console. Games routinely consume large chunks of internal capacity, and the fastest storage path is built into the machine rather than bolted on as an afterthought.
Microsoft attributed the increase to higher component costs, saying on Xbox Wire that console storage and memory prices have risen by more than 2.5 times. The company said it expects those costs to double again by fall 2027.
Microsoft also pointed to the economics of console hardware. Unlike many phones, computers, speakers and other consumer electronics devices, the company said consoles are often sold for less than they cost to manufacture. That is the familiar razor-and-blades model of the console business: keep the box relatively reachable, then make money through games, subscriptions, accessories and the platform cut. That model gets uglier when memory and storage prices run away from the spreadsheet.
The company said it had already raised Xbox console prices in the United States last October by $20 to $70. Microsoft said it had spent recent months working with suppliers on alternatives before deciding on another increase.
Microsoft adds payment and resale programs
Alongside the price increase, Microsoft announced several programs it says are meant to keep Xbox hardware accessible. The company said buy now, pay later options will be available for eligible Xbox hardware purchases through Microsoft Stores, allowing buyers to split payments into short-term, interest-free installments.
Microsoft also said it is working with partners on 0% APR financing for eligible Xbox hardware for up to 12 months. The company said payment options will vary by region, with credit provided by third parties and subject to eligibility and terms.
Microsoft said it is also working with retail partners on programs for previously played consoles. Under that plan, players who are upgrading or no longer using a console would be able to trade it in through participating retailers for cash or store credit. Those units would then be resold at lower prices.
The company also pointed to Xbox Certified Refurbished Consoles sold through Microsoft Stores, which it said are available for up to $100 off MSRP.
The 2 TB model exits the lineup
The clearest product change is the removal of the 2 TB Xbox model. Microsoft did not give a separate explanation for why that version is being retired, but the announcement ties the broader price action to storage and memory costs.
Microsoft said the Xbox Series S remains the lowest-cost console option for players who want access to upcoming and current titles. The company named 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 among the games it expects players to be looking at this year.
The practical result is less flattering than the financing language: new Xbox buyers will pay more for the same storage tiers after Aug. 1, and the highest-capacity version is leaving the shelf. Microsoft’s explanation is component pricing. Buyers will mostly see the number at checkout.
This story draws on original reporting from XBOX Wire.
