The Xbox Series S, initially positioned as the more affordable entry point into the current generation of gaming, is set to increase in price to $500 starting August 1. This new price point matches the original launch price of the more powerful Xbox Series X from November 2020, representing a 67% increase from the Series S's original $300 MSRP.
When the Xbox Series S launched alongside the Series X and PlayStation 5, it offered a compelling value proposition: access to next-generation games with reduced performance and visual fidelity for $300. This made it $100 cheaper than the PlayStation 5's lowest-tier model and $200 less than the premium PS5 and Series X. However, nearly six years after its release, the console's price is moving in the opposite direction of historical precedent for hardware.
This price hike is attributed to ongoing global shortages affecting components like RAM and storage, which are exacerbated by the burgeoning AI industry's demand for chips. Microsoft, as a significant player in AI products, has been noted as a contributor to these supply chain pressures.
The rising cost of consoles has led to discussions about them potentially pricing themselves out of relevance. While the Series S at $500 may still be technically the most affordable next-generation console compared to other rising prices, its appeal as a budget-conscious option is diminished. For consumers looking for an economical way to play new releases, the price increase presents a significant challenge.