Microsoft is increasing Xbox console prices for the third time in the past year, with the latest round hitting both Series S and Series X models. The 512GB Series S jumps from $399 to $499, while 1TB models see hikes of $100 to $150 depending on configuration. The 2TB model is being discontinued entirely.

The company blames rising memory and storage costs for the increases, though it omits a key detail: those same component shortages stem largely from AI datacenter demand. Microsoft's aggressive push into AI infrastructure has contributed to the very supply constraints now driving up consumer hardware costs. The price hikes affect the Series S (512GB) at $499 and 1TB variants ranging from $599 to $799.

These moves put console gaming further out of reach for budget-conscious consumers, especially as the Xbox Series S was positioned as an entry point. The timing coincides with continued console shortage issues that have plagued the gaming industry since 2020.

Despite the increases, Microsoft's offerings remain competitively priced against alternatives like Steam Deck while including a controller in the box. However, the repeated price adjustments signal inflationary pressures in gaming hardware that show no signs of easing.