Microsoft has raised the prices of its Xbox Series S and Series X consoles across Europe, adding further pressure to a hardware division already struggling with declining sales. The price hikes, which reflect higher hardware costs on regional Microsoft storefronts, hit European consumers harder than recent price increases in the United States.

The price adjustments create unusual pricing structures across the console lineup. Notably, the 1 TB Xbox Series S now costs more than the 1 TB Xbox Series X model. The increases follow Microsoft's recent decision to sunset the 2 TB Xbox Series X, a move the company attributed directly to rising component expenses.

The price changes arrive during a difficult period for Xbox hardware performance. In its latest earnings report, Microsoft revealed that Xbox hardware revenue dropped 29 percent year over year, driven primarily by lower overall console sales volume.While Microsoft previously announced price increases of 100 to 150 dollars for the United States market, European consumers face larger price jumps. For example, the 512 GB Xbox Series S saw a 100 dollar increase in the United States compared to a 130 pound increase in the United Kingdom, which translates to roughly 175 dollars.

Industry analysts attribute the rising console prices to a widespread memory supply crisis driven by high demand from artificial intelligence development. Tech companies, including Microsoft, have invested heavily in artificial intelligence infrastructure, which has significantly tightened the global supply of memory components and driven up manufacturing costs.

The hardware supply constraints appear likely to persist for the foreseeable future. Samsung, one of the three major memory manufacturers, warned of a severe memory supply shortage heading into next year, indicating that component production will take time to catch up with global market demand.These ongoing supply challenges could significantly impact the next generation of video game consoles, which industry experts expect to launch between late 2027 and 2028. While manufacturers like Sony and Microsoft traditionally absorb partial hardware losses to recover profits through software sales, sustained high memory costs may push initial launch prices higher for future hardware generations.