Microsoft and Apple Raise Prices Amid Surge in AI-Driven Chip Costs
Microsoft and Apple have announced significant price increases for their gaming consoles and devices, citing rising costs of memory and storage components fueled by surging demand for artificial intelligence (AI) infrastructure, according to official statements and industry reports.
Microsoft Raises Xbox Prices by $100–$150 Starting August 1
Microsoft revealed on Thursday that it will increase the prices of its Xbox consoles by $100 to $150 globally starting August 1, attributing the hike to elevated costs of storage and memory driven by AI-related demand, according to a company statement. The Xbox Series S, the entry-level model, will rise to $500 (approximately €440) in the U.S., while the Xbox Series X will reach $800 (around €705). The 2TB Xbox model will be discontinued.
This marks the third price increase for Xbox following an increase global in May 2025 and another, limited to the United States, in October. The move aligns with broader industry trends as electronics manufacturers grapple with component shortages and inflated prices.
Apple Announces Mac and iPad Price Hikes Linked to AI Demand
Apple also announced price increases for its Mac computers and iPads on Thursday, citing “desafío sin precedentes” in the electronics supply chain due to AI-driven demand for memory chips. The entry-level MacBook Neo will cost $100 more, while the MacBook Air 512GB and iPad Pro 256GB will each rise by $200, according to a company statement. The MacBook Pro 1TB and iPad Air 128GB will see increases of $300 and $150, respectively.
The company described the surge in memory and storage costs as a “desafío sin precedentes” challenge, noting that demand from AI data centers has created an “aumento extraordinario de la demanda de memoria y almacenamiento.” Analysts predict further price hikes for iPhones later this year, with some estimating potential increases of up to $200 for Pro models.
Industry-Wide Price Increases Reflect AI’s Impact on Supply Chains
The price hikes by Microsoft and Apple mirror broader trends across the tech sector. Sony increased PlayStation 5 prices in Europe in April by €100, while Nintendo announced a price rise of more than six percent starting September 1 for its Switch 2. Valve’s new Steam Machine, launched on Monday, is priced at more than $1,000 (about €880) in the basic version, a price higher than expected.
The surge in chip costs stems from a global shortage of memory and storage components, dominated by companies like Samsung, SK Hynix, and Micron. Microsoft noted that memory prices have more than doubled and are projected to double again by late 2027. The company also highlighted that consoles are typically sold at a loss, unlike smartphones or computers.
Analysts Warn of Prolonged Price Pressures
Industry analysts suggest the price increases may persist as AI adoption accelerates. Nabila Popal, an analyst at IDC, stated that recent hikes have exceeded expectations, indicating potential increases of up to $200 for iPhone Pro and Pro Max models. Apple’s stock fell 13,29 dólares, reflecting investor concerns about pricing strategies.
Microsoft’s gaming division, which accounted for around eight percent of its 2025 revenue, has faced declining sales and underperforming game titles, prompting a restructuring in February 2025. The company also reduced the price of its Xbox Game Pass subscription in April 2025 to address customer complaints about affordability.
Why the AI Demand Is Driving Costs Higher
The rapid expansion of AI infrastructure has created a surge in demand for chips. Data centers require vast amounts of memory and storage to train and deploy AI models, leading to a surge in demand for chips. This has strained supply chains, with component prices rising sharply.
Manufacturers are struggling to keep up with the demand, leading to higher prices for consumers. As AI adoption continues, experts predict that these pressures will persist.