Microsoft blames "components crisis" for rising Xbox prices amidst AI greed, which was partly caused by...Microsoft?

Three days ago in a sprawling interview with Entertainment Weekly, new Xbox CEO Asha Sharma said, "gaming is unaffordable in many cases." Today, Xbox announced price hikes for its consoles, the third in the last year.

The increases don't go into effect until August, but it does hit 512GB models with a $100 bump, while 1TB consoles are going up $150. Xbox is also discontinuing its 2TB model.

The Xbox announcement takes a contrite tone and even says that the company "hoped another price increase would not be necessary" after last October's hike.

It all comes only a couple of weeks after a missive from Sharma and Xbox Studios head Matt Booty discussing how Xbox needed a reset, which was quickly followed by news of significant layoffs.

It's a worrisome sign that Xbox knows this will be a problem when most of the announcement is loaded with buy now, pay later and other financing options.

As with most price increase; blame AI

Since the end of 2025, the ongoing memory shortage has slowly but steadily affected every tech company in the world, from phones and laptops to gaming.

Apple, one of the last holdouts, also announced broad price increases today for every device the company makes. At the far end, one version of the flailing Vision Pro now costs $3,699. The lowest announced increase was a $70 bump for the Apple TV 4K, an aging device that many expect to be replaced this year.

Last year, it was the roller-coaster tariffs from the Trump administration that were to blame for varying increases. This year, every single price hike has blamed the memory shortage, which us and others have taken to referring to as RAMaggedon.

"Unfortunately, console storage and memory prices have increased by more than 2.5x, and we expect another doubling by the fall of 2027," Xbox's announcement reads. "The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles."

AI greed and the massive AI data center boom have been driving RAM and storage prices through the roof for months.

As an example, the WD Black m.2 SSD, a hard drive we recommend for upgrading your PS5's internal memory cost around $125 last June. It's on sale for Prime Day right now, but current prices have it at $250, a current low after the SSD hit nearly $300 in April.

Microsoft partly to blame

There are other companies to truly hold accountable for the memory crisis. Nvidia, OpenAI, and Google have made massive investments in what they call artificial intelligence.

But we can't absolve Microsoft (or Apple) as both companies, laggards in the headlong race toward AI, have also invested heavily in AI, with varying degrees of success.

Just this month at Microsoft Build 2026, the company spent the majority of the event discussing AI and "agentic" systems. Most of the work is business-focused, but it's clear AI is what has the company's attention right now. This is despite promises to pull back on stuffing Windows 11 with AI earlier in the year.

Gamers don't want it

Gamers on the whole are a capricious bunch, to put things nicely, but as a recent Game Oracle study found, they don't want AI. Titles with the AI-generated assets tag on Steam received 53% fewer ratings, indicating a lack of interest, and were more likely to be negatively reviewed.

Now, it's possible that AI is allowing more lazy developers to push out more slop, a veritable abyss that will seemingly never go away, AI or not.

Still, it speaks to a wider trend of consumers rejecting AI. Marketing Brew reports that 65% of respondents to a study said they never wanted to hear about AI again.

CBS News just reported today that despite humongous investments in AI, companies don't really have customers. That's both consumers and businesses that are discovering that firing workers for "AI solutions" has netted next to zero in returns.

Our friends at Tom's Hardware reported in February that two-thirds of customers reject AI on their devices.

Between increasing prices for the companies themselves and their customers rejecting their AI-focused products, there will be a breaking point. The question is, how close are we to reaching it?

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