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Xbox's planned price increase for Xbox Series X and Xbox Series S consoles will come into effect on Saturday, August 1st, but it appears Microsoft could still end up selling its hardware at a loss.
As seems to be the norm everywhere right now, rising manufacturing costs caused by the ongoing component shortage crisis are the focus of blame here. Demand for AI infrastructure has pushed memory chip prices to record highs, creating a full-blown RAMpocalypse that understandably forced Microsoft to tack on an extra $100 to the price of Xbox Series X and S hardware.
"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."
On that note, Windows Central writer Jez Corden claims sources told him "Xbox is losing around $150~ per Xbox Series X|S sold recently due to memory price increases" meaning Microsoft is likely to continue to lose $50 per unit sold even after this weekend's price hike.
It raises the question what this could mean for the future of Xbox hardware, specifically the direction of Project Helix.
When we asked you if Project Helix would cost more than the $1049 Steam Machine, the majority of Pure Xbox voters believed it would. So, how would Xbox reasonably make Project Helix feasible? Corden believes making it an "open" device with access to Steam and Epic stores just doesn't make sense anymore - which if rumours are to be believed, was the plan for next-gen hybrid console.
Just last month Xbox Boss Asha Sharma spoke about the need to "innovate" ways to make Project Helix cheaper, stating:
"I think it's expensive if we do not innovate. I came to help that problem. It's natural that prices go up, every generation around us is raising prices, but I don't think you can raise prices through the hardware crisis that we're seeing, and so it will require fundamental change in terms of how we innovate and how we think about the business models and how we go bring this to market, and we're working on that."
It's all a bit pants, if you ask me. Rising production costs, price hikes, and the concern I might not be able to afford the next-gen Xbox. I'm not convinced Sharma will be able to keep the next generation hardware below $1000 with PC integration, but I also doubt Xbox can maintain a healthy business model in the current component crisis, only expected to get worse heading into 2027.