Microsoft, the same Company that last week reported quarterly income of US$35.8 billion, has moved to jack up the price of its struggling Xbox consoles in Australia by as much as $250, with the increases landing just months out from the critical Black Friday & Christmas quarter.

The Australian rises came into effect on 1 August 2026 and they are steep, between $150 and $250 per console, or roughly 25% to 30%, pushing the disc-drive Xbox Series X over the $1,000 mark for the first time.

The new Australian RRPs are: Xbox Series S 512GB $699, Xbox Series S 1TB $849, Xbox Series X 1TB Digital $999 and Xbox Series X 1TB $1,099.

The Series S consoles rose by $150 and $250 respectively, while both Series X consoles jumped $250. Prior to the hike, the Series S 512GB was selling locally for $549 and the Series S 1TB for $599.

Profits Up, Prices Up

The move comes as Microsoft rakes in record profits elsewhere in the business. For the quarter ended 30 June 2026, the Company reported income of US$35.8 billion, up 31%, on revenues of US$90.0 billion.

Microsoft Cloud revenue alone hit US$59.3 billion for the quarter, up 27% year-on-year, helped along by an earlier increase in the cost of Microsoft 365 subscriptions, a product suite that is not affected by the memory price crisis the Company is now blaming for the Xbox hikes.

Microsoft said in June it had “hoped another price increase would not be necessary”, pointing to the surging cost of console storage and memory.

RAM, once a cheap commodity component, has shot up in price due in part to demand from AI firms, while graphics processors, a key component in consoles and gaming PCs, have also risen sharply because of their use in generating AI content.

The irony is not lost on observers, Microsoft’s own multi-billion-dollar AI infrastructure spending is a contributor to the very component shortage it is now passing on to console buyers.

Retailers Split On Timing

JB Hi-Fi has already moved to the new pricing, while Amazon and Target were still showing old prices as of the weekend, with the Series X Digital at $748 on Amazon and the Series S 1TB at $599 at Target, deals likely to be short-lived once existing stock clears.

The Xbox rises are part of a category-wide repricing heading into Christmas. Sony pushed through comparable PlayStation 5 increases in April, and Nintendo hikes are expected from 1 September.

Backlash Builds

Consumers have not held back. X user @BlackPanthaa called the new Series S price “absolutely disgusting”, while one Reddit user branded it “highway robbery for a console released 6 years ago”.

Some fear prices could climb higher still. “This ain’t even the ceiling,” wrote Windows Central editor Jez Corden.

Amazon’s gaming boss recently told the BBC that rising hardware costs may push more consumers to ditch consoles altogether in favour of game streaming.

The hikes come at a torrid time for the Xbox division. Microsoft recently revealed revenues had dipped across its gaming business, and in July it initiated what executives described as “the most significant restructure in Xbox history”, cutting approximately 3,200 roles.