Microsoft hikes Xbox prices after Apple increased laptop costs amid global memory shortage
Microsoft have hiked the prices of Xbox consoles as the tech industry battles with chip and memory shortages caused by the onset of artificial intelligence.
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The tech giant has followed competitor Apple in raising the prices of its core products due to the cost of memory for its systems.
The price hike follows a similar rise last year.
The memory cost crisis has seen Microsoft also announce that 2TB Xbox consoles are being discontinued.
Fellow gaming platform PlayStation raised the price of the PS5 in March this year.
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Xbox said on Thursday that the price of its basic console, the Xbox Series S, will go up by $100 (£75) to $499.
The heavy-duty Xbox Series X will also see its price hiked, with the version with more memory and a disc drive rising $150 to $749.
The new prices will take effect from August.
Microsoft said it had "hoped another price increase would not be necessary", but blamed the rising cost of console storage and memory for needing to raise prices on consumers.
"The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles," Xbox said.
Microsoft has been a leading proponent of AI through its Copilot agent, which is understood to be causing the price components with a spike in demand for memory and microchips.
The latest price hike came after Apple shares tumbled at their fastest rate for more than a year after the iPhone manufacturer said it was hiking prices in response to soaring memory and storage costs.
The slump in value knocked stocks across the tech sector and weighed on early trading in Asia on Friday morning.
The Silicon Valley firm saw its shares drop by 6.1% overnight, wiping the equivalent of roughly 270 billion US dollars (£204 billion) off its market value.
It represented the company’s largest decline in its share over a single day since April 2025.
Traders sold off the stock after the company said it would increase prices across several of its MacBook and iPad models.
It marked the first formal move by Apple to pass increases in memory and storage costs onto its customers.
In a statement, the company said: “We have shielded our customers from these increases so far, but we have now reached a point where we need to begin raising prices on a number of products, including today’s increases for iPad and Mac.
“We have never seen a component price increase this much, this quickly.”