Xbox Raised Prices Again, and Microsoft Helped Cause the Reason Why
Xbox just raised console prices across three regions for a shortage its own parent company is helping fuel, on a console that's already losing this generation by a landslide.
Let's get the numbers out of the way first, because they're bad enough on their own. Then I want to get into the part that actually gets under my skin, which is that Microsoft isn't just a victim of this shortage. It's one of the companies driving it.
Microsoft confirmed back on June 25 that Series X and Series S prices would rise on August 1. It shared US numbers at the time and nothing else. Everyone outside the US found out this weekend, when the prices just changed on the storefront and people had to start comparing screenshots to work out how bad it actually was.
The Full Price Breakdown
Here's every SKU, in every region, before and after.
The Percentages Are Worse Than the Dollar Amounts Suggest
Line up the US numbers next to Europe and the UK and the raw dollar figures actually undersell it. The US hike on the 1TB disc Series X works out to about 23 percent. The same console just went up 33 percent in the eurozone and 34 percent in the UK. The gap gets worse at the low end. The entry-level Series S rose 25 percent in the US, but 43 percent in both Europe and the UK.
Convert the new prices back to dollars and it gets stranger. European buyers are now paying roughly $920 for a console Americans get for $800. UK buyers are close behind around $900. The "budget" Series S in Europe now costs more than a Series X used to. Whatever "budget" is supposed to mean here, Xbox doesn't get to use that word with a straight face anymore.
So What's the Actual Plan Here
Here's where I stop being diplomatic about it. Xbox is not competing with PlayStation right now, not in any way that matters. Sony's reportedly shipped north of 95 million PS5 units. Microsoft stopped sharing its own hardware numbers a while back, which is rarely a sign things are going well, but outside estimates put the current Xbox Series total around 35 million. That's not a close race. Xbox is losing badly, and raising prices on the way down doesn't read like a comeback plan, it reads like a company protecting margin on a shrinking pile of customers instead of trying to grow it.
I don't know what the actual strategy is anymore, and I don't think that's just me being cynical about it. A shrinking audience is exactly the group you'd expect a company to protect on price, not squeeze harder. Instead the hardware gets more expensive, the games aren't getting cheaper, and the answer to "why would I buy this over a PS5" keeps getting thinner every few months.
Microsoft Helped Cause This, Which Makes the Sympathy a Hard Sell
Microsoft isn't just catching stray damage from an industry-wide memory shortage. It's one of the companies causing it. Microsoft's own capital spending for 2026 is projected around $190 billion, most of it AI infrastructure, and its own CFO said on an earnings call that $25 billion of that increase came directly from higher memory and chip prices. Microsoft is also one of the hyperscalers reportedly locking in long-term supply contracts with memory manufacturers, the kind of deal that guarantees Azure gets DRAM before anyone building a console does.
So when Xbox says it's losing $150 a unit because memory got too expensive, that's true. It's also a problem the same company helped create by outbidding basically everyone else on the planet for the exact chips a console needs. Sure, Xbox the console division and Microsoft's AI spending technically live in different budget lines. That distinction won't mean much to someone who just paid £130 more for a Series S.
This Is the Same Math Behind the Steam Rumor
Corden's reporting on the per-console losses came packaged with a bigger argument: why he thinks keeping third-party storefronts like Steam on Xbox's next console no longer makes financial sense. If Xbox is already losing money on hardware it fully controls, a future where a big chunk of Series X and S owners buy their games through Steam instead of the Xbox store starts looking like a business Microsoft genuinely can't run twice over. The console price hike and the Steam speculation aren't two separate stories. They're the same margin problem showing up twice in one month, and Microsoft's own AI budget is a real part of why that margin got squeezed in the first place. Rising RAM and NAND prices have already been reshaping other Xbox hardware decisions this year too, so none of this is happening in a vacuum.
Microsoft hasn't said whether more regional price hikes are coming. Given how many it's already made this year, and how much of the shortage behind them traces back to its own AI budget, I wouldn't bet against it.
