Microsoft announced on Friday that it is raising the prices of its Xbox gaming consoles in the U.S. for the second time this year. The company cited tariff-induced cost pressures, strong competition, and uncertain consumer spending as the reasons for the move. The new prices will take effect on October 3.
Microsoft attributed the price hikes to “changes in the macroeconomic environment.” The one-terabyte Series S will now cost approximately $450, while the high-end Series X will be priced at around $650. The special edition two-terabyte Galaxy Black Series X will retail for nearly $800.
This price increase follows a previous one in May in several markets, including the U.S., Europe, Australia, and the UK. The hikes come as U.S. President Donald Trump’s tariffs on imports from manufacturing hubs like China are increasing the cost of hardware and squeezing profit margins. Coupled with the May increase, the Xbox Series X has now seen a $150 price hike in just six months, which may cause gamers to reconsider their budgets amid rising inflation.
Joost van Dreunen, a games professor at NYU Stern School of Business, explained that the price increase isn’t just about profiting or software development costs. “Instead, it is the result of tariff increases and rising costs in the supply chain,” he said. “Hardware is being repriced to absorb new trade pressures.”
Xbox’s rival, Sony, also raised the prices of its PlayStation 5 consoles in the U.S. by around $50 last month, with its most expensive PS5 Pro retailing for $749.99. Microsoft stated that prices for controllers, headsets, and consoles in other markets will remain unchanged.
The video game industry had high hopes for console sales this year, driven by the launch of new premium titles like Grand Theft Auto VI and new hardware such as the Nintendo Switch 2. However, title delays and price hikes are now casting a shadow over the industry’s near-term outlook.
