Summary
Microsoft announced a planned price increase for Xbox consoles, citing rising component costs for storage and memory. Effective August 1, 2026, the company will raise prices by $100 on 512 GB models and by $150 on 1 TB models, and will discontinue the 2 TB model. Microsoft also described a set of customer-facing measures including Buy Now, Pay Later financing at Microsoft Stores, 0% APR financing options via Amazon for eligible purchases, trade-in programs with retail partners, and an expanded supply of Xbox Certified Refurbished consoles.
Pricing changes and rationale
Microsoft said it has seen console storage and memory prices rise by more than 2.5 times and anticipates another doubling of those component costs by fall 2027. The company noted that, unlike many consumer devices such as phones and computers, consoles are frequently sold at prices below production cost. The new pricing schedule becomes effective on August 1, 2026, with increases of $100 for 512 GB models and $150 for 1 TB models. Microsoft will discontinue the 2 TB model.
Customer financing and payment options
To help customers manage the higher retail prices, Microsoft said it will offer Buy Now, Pay Later options on eligible Xbox hardware purchases through Microsoft Stores, permitting payments to be split into short-term, interest-free installments. For customers buying eligible Xbox hardware through Amazon, Microsoft said 0% APR financing will be available for up to 12 months.
Refurbished and trade-in programs
The company said it is coordinating with retail partners to make previously played consoles available at lower prices. Customers will be able to trade in consoles with participating retail partners for cash or store credit; those trade-in units will be resold at reduced prices. Separately, Microsoft Stores will offer Xbox Certified Refurbished consoles for up to $100 off the manufacturer's suggested retail price.
Low-cost access and game availability
Microsoft highlighted that the Xbox Series S remains the most affordable pathway for console players to access a slate of titles, listing 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 as examples of games available to console players.
Context
The announced adjustment follows a range of earlier U.S. price increases last October, which ran between $20 and $70. Microsoft framed the current round of changes as a response to rapidly rising component costs and as a rebalancing of pricing in a category where hardware is often sold at or below production cost.