Microsoft Xbox Joins Apple in Raising Prices Amid AI-Driven Memory Shortage

A day after Apple increased the prices of several MacBooks and iPads, Microsoft has announced that Xbox consoles will also become significantly more expensive worldwide, blaming the same problem: soaring memory and storage chip prices fuelled by the artificial intelligence boom.

For consumers, it is another sign that AI is beginning to affect far more than chatbots and data centres. It is now hitting the prices of everyday gadgets.

Xbox Consoles to Cost More From August

Microsoft says Xbox console prices will increase globally from August 1.

The company will raise prices by $100 for 512GB models and $150 for 1TB variants, while discontinuing the 2TB version altogether. According to Xbox, storage and memory prices have already risen by more than 2.5 times and could double again by late 2027 if current trends continue.

The announcement marks the third price hike for Xbox consoles in just over a year, following earlier increases driven by tariffs, inflation, and supply chain pressures.

Apple Opened the Floodgates

Microsoft's decision comes less than 24 hours after Apple raised prices across multiple product categories, including MacBooks, iPads, HomePods, and Apple TV devices.

Apple said it could no longer absorb rising memory and storage costs, despite having one of the strongest supply chains in the technology industry. Industry analysts believe the move could eventually be followed by higher iPhone prices later this year, although Apple has not announced any changes to its smartphone lineup so far.

AI Is Creating a New Kind of Chip Shortage

Unlike previous semiconductor shortages caused by factory shutdowns or logistics disruptions, this one is being driven by demand. Companies such as OpenAI, Microsoft, Google, Meta, Amazon, and xAI are investing billions of dollars in AI infrastructure, requiring enormous quantities of high-performance DRAM and NAND memory for their data centres.

Memory manufacturers, including Samsung, SK hynix, Micron, and others, are prioritising those lucrative AI orders, leaving fewer components available for laptops, gaming consoles, smartphones, and other consumer electronics.

Industry tracker TrendForce estimates memory prices surged nearly 98% during the first quarter of 2026 and are expected to climb sharply again this quarter.

It's Not Just Apple and Microsoft

The ripple effects are spreading across the technology industry. Sony raised PlayStation 5 prices earlier this year, while several industry groups representing automakers, retailers, and electronics companies have warned that the memory shortage could trigger widespread increases across consumer products.

Analysts also believe companies without Apple's purchasing power may be forced to implement even steeper price hikes in the coming months.

What This Means for Indian Buyers

Microsoft has not yet announced revised Indian pricing for Xbox consoles. However, global price increases are often reflected in India after accounting for taxes, import duties, and exchange rates.

For Indian consumers planning to buy a gaming console anytime soon, the current situation may mean paying more than expected.