Microsoft will increase the retail price of its gaming consoles by up to $150 starting August 1, 2026, citing a surge in the cost of memory and storage components. According to the company’s official blog, the price hike affects all models, with 512 GB units rising by $100 and 1 TB units by $150. Additionally, Microsoft confirmed it is discontinuing its 2 TB console configuration as the industry faces a deepening hardware supply crisis.
Why are console prices rising now?
The primary driver behind the price adjustment is a 2.5x increase in the cost of console storage and memory, according to Microsoft. The company reports that these costs are expected to double again by the fall of 2027. Unlike other consumer electronics, Microsoft states that its consoles are typically sold at a loss to encourage platform adoption, leaving the company with little financial cushion to absorb rising component prices.
Microsoft’s decision to sunset its 2 TB model mirrors a wider industry trend of stripping back high-end hardware options. This mirrors Apple’s 2025 move to pull high-capacity RAM upgrades for the Mac Studio, forcing users to rely on the secondary market for premium configurations.
How does the hardware shortage impact high-end models?
Microsoft’s decision to remove the 2 TB model from its lineup suggests that high-end configurations have become unsustainable to produce. When components are scarce, manufacturers often prioritize base models to maintain volume. This strategy is not limited to gaming; according to reporting by 9to5Mac, Apple stopped offering 256 GB and 512 GB RAM upgrades for the Mac Studio in 2025. Consequently, the only way to acquire those high-performance machines is through secondary platforms like eBay, where units are currently listing for between $25,000 and $30,000.
What does this mean for the future of consumer tech?
The current hardware crisis suggests a shift away from “pro” or “ultra” consumer tiers as component costs climb. When profit margins on high-end configurations disappear due to supply-side inflation, companies appear more likely to simplify their product stacks. While Microsoft is raising prices to keep its entry-level units on shelves, the sunsetting of the 2 TB model reflects a broader industry preference for limiting high-cost, high-memory hardware during periods of extreme component volatility.
Frequently Asked Questions
- How much will my console cost after August 1, 2026?
512 GB models will see a $100 price increase, while 1 TB models will increase by $150, according to Microsoft. - Is the 2 TB model being discontinued?
Yes, Microsoft has officially confirmed the sunsetting of the 2 TB console configuration. - Why are prices increasing for consoles but not other devices?
Microsoft attributes this to the fact that consoles are often sold for less than their manufacturing cost, whereas other consumer electronics typically carry higher profit margins.
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