Xbox console prices are jumping by up to $150 in August

Microsoft is raising the price of Xbox consoles by up to $150 and discontinuing the 2TB model entirely on August 1.

According to Team Xbox, the 512GB models will see a $100 increase. The 1TB models will jump by $150 worldwide. The company is also sunsetting the high-capacity 2TB console, removing it from the retail lineup completely.

The current console generation launched in November 2020. The entry-level Series S debuted at $299. The flagship Series X launched at $499. Historically, console hardware gets cheaper to manufacture over time, leading to price drops or bundled games. Microsoft is moving in the exact opposite direction.

The 512GB Series S was originally marketed as the ultimate budget-friendly entry point for modern gaming. Adding $100 to its price tag completely changes that value proposition. It pushes the digital-only, 1440p-targeted machine closer to the original launch price of premium 4K consoles.

A $150 premium on a 1TB console in its sixth year on the market is a massive shift in retail strategy. It alters the math for anyone deciding between a console and a budget gaming PC.

The 2TB model is dead

The August 1 update also kills off the 2TB Xbox model. Modern game installs easily clear 100GB, and titles like Call of Duty and major open-world RPGs will fill a 1TB drive almost immediately.

Removing the 2TB option forces players to rely entirely on proprietary expansion cards to manage their libraries. You cannot play current-generation Xbox games directly from a standard external USB hard drive. They must be installed on the internal NVMe SSD or the official Seagate and Western Digital expansion cards.

Those proprietary expansion cards are expensive. Buying a 1TB console and a separate 1TB expansion card will likely cost more than the discontinued 2TB console did.

Paying more for 2020 hardware

Sony has also raised PlayStation 5 prices in various international markets over the last few years. The difference here is the sheer size of the jump. A $150 hike across the board is unprecedented for base console hardware this late in a generation.

While the internal components of the Series S have not changed since 2020, new Xbox Series X models released in October 2024 feature a redesigned motherboard with a smaller 6nm system-on-chip (compared to the original 7nm APU) and replaced the vapor chamber cooling with copper heat pipes, leading to lower energy consumption. You are paying 2026 premium prices for a custom AMD Zen 2 CPU and RDNA 2 graphics architecture. The hardware is aging, but the cost of entry is skyrocketing.

Anyone planning to buy an Xbox has until the end of July to find one at the current retail price. After August 1, the barrier to entry gets much higher.