AI Chip Costs Force Xbox to Raise Prices After PlayStation as GTA VI Release Looms

Microsoft raised Xbox Series X prices by $150 to $749 this week, blaming soaring memory chip costs. The hike follows Sony’s earlier PlayStation 5 price increase and lands months before Grand Theft Auto VI’s November 19 launch.

Xbox’s Series S rose 25% to $499, a steeper increase than Sony’s $100 PlayStation 5 hike in March. Analysts say demand for artificial intelligence (AI) memory chips is squeezing console margins industrywide.

Rising Memory Costs Squeeze Hardware Margins

Microsoft’s increase pushes the premium Xbox Series X to $749, up from $599. The base Series S now costs $499, up from $399.

Sony raised PlayStation 5 prices by $100 in March, citing global economic pressures. The console now retails at $649.99 in the US.

Piers Harding-Rolls of Ampere Analysis linked that increase to surging demand for random-access memory (RAM). Both consoles rely on RAM for short-term memory.

“With no sign of prices easing largely due to demand for AI infrastructure, Sony will have made the move to protect its slim hardware margins.”

Binance Research labels this the chipflation inflation trend. DRAM prices have nearly sextupled in a year as AI data centers soak up chip supply meant for consumer devices. Apple felt the same squeeze, raising Mac and iPad prices over memory costs earlier this year.

GTA VI Looms Over Console Pricing

Rockstar’s Grand Theft Auto VI (GTA VI) launches November 19, exclusively on PlayStation 5 and Xbox Series X/S, per its confirmed release date. Standard editions cost $79.99, and an Ultimate edition costs $99.99.

Windows Central editor Jez Corden warned the increases may not be final.

“This ain’t even the ceiling.”

Take-Two stock already dropped once on pre-order pricing details, showing investors are watching closely. Meanwhile, AI memory stocks like Micron have surged as chipmakers profit from the same shortage squeezing console makers.

Microsoft’s increase outpaces Sony’s by a wide margin heading into the holiday season. Sony may still follow with another PlayStation 5 hike before GTA VI arrives. That leaves buyers weighing which console costs less before launch day.

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