Xbox Hardware Sales Hit a U.S. Low as Prices Keep Rising

Xbox console sales have fallen to their lowest level ever recorded in the United States for this point in a year, even as the average price paid for the hardware has reached a record high.

Circana data for January through August 2026 shows Xbox hardware unit sales down 33% from the same period in 2025. During those eight months, buyers paid an average of $529 for a new Xbox console—26% more than a year earlier. The numbers describe a difficult pairing for Microsoft: fewer people are buying, while those who do are paying substantially more.

This is not only an Xbox problem. PlayStation hardware unit sales were down 25% over the same period, reaching their lowest year-to-date level since 2013. Its average selling price rose 20% to a record $597. Still, Xbox has the sharper sales decline and the more sobering historical low.

A $100 to $150 increase changed the value equation

Microsoft raised Xbox console prices worldwide on August 1. The company added $100 to 512GB models and $150 to 1TB models, while discontinuing the 2TB version. That followed a smaller U.S. increase of $20 to $70 in October 2025.

Microsoft blamed the latest adjustment on storage and memory costs, saying those components had become more than 2.5 times as expensive and could double again by fall 2027. The company also noted that consoles are usually sold at or below manufacturing cost, with revenue earned later through games, subscriptions, and accessories.

That explanation may be reasonable from a supply-chain perspective, but it does not make the checkout price easier to accept. The Xbox Series X and Series S launched in 2020. Six years into a console generation, buyers normally expect bundles and discounts—not repeated increases. A higher price is especially hard to justify for anyone who already owns a capable gaming PC, a PlayStation, or an older Xbox that still runs the games they use most.

Xbox no longer requires an Xbox console

Microsoft’s broader gaming strategy may also be reducing the urgency to buy its hardware. Xbox Cloud Gaming works on supported televisions, Amazon Fire TV devices, PCs, phones, and tablets. A compatible controller and an eligible Game Pass plan can replace a console for players who accept streaming latency and depend on a reliable internet connection.

The company has continued widening that route. In 2026, it began rolling out the Xbox app to supported Hisense and other televisions running VIDAA OS 9.6, letting subscribers stream games directly on the TV. That expands the Xbox audience, but it also gives price-sensitive customers another reason to postpone a console purchase.

Microsoft has also put more of its games on rival platforms. That can grow software sales and reach players wherever they are, yet it weakens one of the traditional reasons to buy dedicated hardware: access to games unavailable elsewhere. This is an inference from Microsoft’s platform strategy, not proof that cloud gaming or multiplatform releases caused the 33% decline. Price, the age of the current generation, economic conditions, and the timing of major releases can all affect demand.

Microsoft is trying to soften the upfront cost

Alongside the price increase, Microsoft announced buy-now-pay-later options, financing of up to 12 months at 0% APR through participating partners, trade-in programs, and certified refurbished consoles priced as much as $100 below MSRP. Availability and eligibility vary, so shoppers should compare the total cost rather than focusing only on the monthly payment.

For someone shopping now, refurbished hardware and retailer bundles may offer better value than a new console at full price. A Series X still makes sense for buyers who want a disc drive, local 4K gaming, or a living-room system that does not rely on streaming. A Series S remains smaller and less expensive, but its limited storage and digital-only design can become restrictive as game sizes grow.

Cloud gaming is the cheapest entry point if the connection is strong enough, though image quality, input delay, game availability, and service outages remain real compromises. A PC costs more upfront in many cases but can be more flexible for work, upgrades, and access to multiple storefronts.

The data is a warning, not a final verdict

Circana’s figures cover U.S. retail sales through August, not worldwide performance or the full calendar year. They also measure hardware units and average selling prices, so they do not reveal how much money Microsoft is earning from Game Pass, cloud play, PC games, or software sold on other consoles.

Even with those limits, the direction is clear. Record prices and record-low unit sales show that the current console proposition is under pressure. Microsoft can reach more players without selling them a box, but it still has to give buyers a strong reason to spend more than $500 on one.