A Six-Year-Old Console for $900? Xbox's EU Prices Land

When Microsoft warned in late June that Xbox Series S and X prices would rise "worldwide" on August 1st, it shared the US numbers but left Europe and the UK hanging. Now we know why it waited. The new prices, which went into effect on August 1st and were originally spotted by users on ResetEra, push the disc-equipped 1TB Xbox Series X to €799.99 in Europe and £669.99 in the UK. That is roughly $900 equivalent for a console that launched nearly six years ago.

I covered the UK side of this story a few days ago, but the full European picture makes it worse. Every SKU took a serious hit. Here's the breakdown:

The 512GB Xbox Series S jumped from €349.99 to €499.99 (£299.99 to £429.99). The 1TB Series S went from €399.99 to €599.99 (£349.99 to £519.99). The 1TB digital Series X climbed from €549.99 to €749.99 (£449.99 to £619.99). And the 1TB disc Series X rose from €599.99 to €799.99 (£499.99 to £669.99). European increases hit €150 to €200 depending on the model, while UK hikes ranged from £130 to £170.

Microsoft has justified the increases by pointing to a components crisis. In a blog post, the company said:

Console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027. The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles. Unlike phones, computers, speakers, and other consumer devices, consoles are typically not sold at a profit, but instead for less than they cost to make.

The memory shortage is real, and Sony has raised PS5 and PS5 Pro prices too. But Sony is selling consoles. According to GamesIndustry.biz, Sony has shipped over 95 million PS5 units, while estimates put Xbox Series lifetime sales at roughly 35 million. Microsoft itself reported a $1.7 billion decline in Xbox revenue in 2026, with hardware sales dropping 29% year-on-year. Raising prices on hardware that's already struggling to move is a bold strategy.

The Sustainability Problem

These hikes didn't arrive in a vacuum. In the weeks after the June announcement, Microsoft laid off 3,200 employees and divested five studios. CEO Satya Nadella said during an earnings call that Xbox leadership was "making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long-term growth." Xbox CEO Asha Sharma set a target of half a billion daily players by 2030 and said the division needs to "return to growth by the end of 2027."

I keep coming back to the contradiction. You don't grow a hardware install base by pricing your six-year-old console at €800. The Series S was supposed to be the affordable entry point to the Xbox ecosystem. At €499.99, it now costs what the disc-equipped Series X cost before the hike. The entire pricing ladder has shifted upward by one rung, except there's nothing at the bottom anymore. Microsoft also discontinued the 2TB model entirely.

The component crisis explanation holds water to a point. Memory and storage costs are spiking across consumer electronics. But as Kotaku's Lewis Parker pointed out, it's hard to ignore that Microsoft has poured hundreds of billions into AI datacenter infrastructure, the kind of spending that puts enormous pressure on the same component supply chains Xbox depends on. Microsoft hasn't drawn that connection publicly, and probably never will.

What makes this especially painful is the timing relative to Grand Theft Auto 6. Rockstar's game launches later this year, and it will be the single biggest console-selling event of this generation. Casual buyers who don't already own current-gen hardware will be shopping. Sony can absorb its own price increases because the PS5 has market momentum and brand loyalty in Europe. Xbox, sitting at roughly a third of PlayStation's install base and now asking €800 for its top console, is going to lose that battle before it starts.

Gears of War: E-Day launches as an Xbox console exclusive on October 6th, reportedly carrying a budget north of $400 million. It's the biggest exclusive Microsoft has in the pipeline. Asking European customers to spend €800 on the hardware to play it, when the game is also available on PC, is a tough sell. Microsoft needed this to be the year it clawed back market share in Europe. Instead, it priced itself out of the conversation.