Xbox and console prices rise as chips used in tech get more expensive

Buying a new Xbox is getting more expensive in the UK after Microsoft raised the price of its game consoles around the world.

The Xbox Series X, with a disc drive, now costs about £670 in the UK. It previously cost about £500. The smaller Xbox Series S now costs about £430, up from about £300. That means the Series S has gone up by roughly 43%. Microsoft has also raised prices in the United States and Europe.

It follows price rises for Sony PlayStation 5 consoles earlier this year.

Microsoft says the main reason is the rising cost of memory and storage chips adding, "we hoped another price increase would not be necessary."

These are tiny but important parts inside computers, consoles and other electronic devices.

Memory helps a machine work on tasks quickly. Storage is where games, apps, photos and other files are kept. Modern games can be very large, so consoles need enough storage and fast memory to run them properly.

One reason chips are becoming more expensive is the growth of artificial intelligence (AI).

AI systems need huge data centres - buildings full of powerful computers. These computers use many of the same kinds of chips needed in everyday technology.

When lots of companies want the same parts, prices can go up and with higher parts costs, devices cost more to build.

Higher chip costs could also affect other devices, including mobile phones. Smartphones use memory and storage chips too, and analysts have predicted that average smartphone prices could rise in 2026 because memory chips are becoming more expensive.

However, this does not mean every phone will definitely cost more.

Large tech firms have faced criticism for passing higher costs on to customers, especially when people are being asked to pay more for consoles that were first released several years ago.

Rising prices have also led some people in the games industry to ask whether more players might choose to stream games instead of buying new consoles.

Streaming games, also known as cloud gaming, means playing a game over the internet on devices such as phones, tablets, TVs or laptops, instead of needing a console at home.

Cloud gaming has been described as the future of video games before, but it has not always been successful. Google shut down its Stadia streaming service in 2023, after it failed to become widely used.

However, several big gaming companies, including Xbox, PlayStation and Amazon, still offer game streaming services.

In a recent BBC interview, Amazon head of gaming Jeff Gattis said he believes rising hardware costs could make more people consider streaming. "As hardware becomes more expensive, and as streaming technology continues to improve, I think you'll naturally see more people asking whether they actually need that dedicated device," he said.

Microsoft said console storage and memory prices could rise again by autumn 2027.