Microsoft Hikes Xbox Prices Again, Kills the 2TB Console

Xbox owners are about to pay more for hardware for the second time in less than a year. Microsoft has confirmed another worldwide price increase across its console lineup, set to take effect on August 1, 2026, alongside the discontinuation of the 2TB Xbox model from the range entirely. It's a jarring repeat of a hike that landed just months ago, and this time the increases are steeper and apply globally rather than to a single market, reigniting questions about how much more console gaming is about to cost as the hardware business absorbs rising component costs.

What's Changing on August 1

Starting August 1, 2026, every 512GB Xbox console will cost $100 more, while 1TB models will jump by $150. Both increases apply worldwide, not just in the US, marking a broader rollout than Microsoft's previous adjustment. Alongside the new pricing, Microsoft is discontinuing the 2TB Xbox console entirely, trimming the high-end storage option out of the lineup as prices climb elsewhere and leaving 512GB and 1TB as the remaining choices for shoppers.

The Second Hike in Under a Year

This isn't the first time Microsoft has gone back to the pricing table recently. Back in October 2025, the company raised US Xbox prices by $20 and $70 depending on the model. Less than a year later, it's doing so again, this time with larger dollar increases and a global scope, suggesting the pressures behind the first hike haven't let up and may in fact be accelerating.

Why Microsoft Says Prices Are Rising

Microsoft is pointing to the cost of console components as the driver behind the increase. According to the company, prices for storage and memory used in its consoles have already climbed by more than 2.5 times, and Microsoft expects those costs to double again by the fall of 2027. Microsoft frames this as part of a wider components crisis hitting the entire consumer electronics industry, though it says the impact lands especially hard on game consoles specifically, more so than on other electronics categories. That's tied to how consoles are typically priced in the first place: manufacturers routinely sell hardware at a loss relative to what it costs to build, then recoup the difference through game sales, subscriptions, and other services over the console's lifespan. As component costs rise sharply, that math becomes harder to sustain without adjusting the sticker price, and Microsoft's framing suggests it sees little near-term relief on the horizon. With two price increases in less than a year and a projected doubling of key component costs by 2027, Microsoft's messaging suggests this won't be the last adjustment to Xbox hardware pricing. For now, shoppers eyeing a 512GB or 1TB Xbox have until August 1, 2026 before the new prices take hold, and anyone considering the 2TB model faces a shrinking window before it disappears from the lineup for good. Whether rival platform holders follow with hikes of their own remains an open question.