Microsoft has adjusted the recommended pricing for its Xbox Series S and X consoles and controllers across the globe, effective today, May 1st, 2025.
The company also intends to lift the cost of some new first-party games to $79.99 later this year, a move impacting gamers heading into the holiday season. While the company’s official statement attributes the changes to market conditions and development costs, the increases arrive amidst widespread industry anxiety concerning US trade tariffs implemented by the Trump administration.
In a statement, Microsoft acknowledged the difficulty of the changes: “We understand that these changes are challenging, and they were made with careful consideration given market conditions and the rising cost of development. Looking ahead, we continue to focus on offering more ways to play more games across any screen and ensuring value for Xbox players.”
However, Microsoft “declined to comment on President Trump’s tariffs specifically” when issuing this statement, despite analyst consensus linking the hikes directly to tariff uncertainty. For now, the cost of Xbox Game Pass subscriptions remains unchanged.
In the United States, the Xbox Series X sees its price climb by $100 to $599.99. The entry-level 512GB Xbox Series S is now $379.99 (an $80 increase), while the 1TB Series S model sits at $429.99. The recently announced Xbox Series X digital edition will cost $549.99, and the premium 2TB galaxy black special edition commands a $729.99 price tag.
Accessories are also affected; the standard Xbox wireless controller moves to $64.99, with specific editions like Color, Special, and Limited following suit, while the Elite Wireless Controller Series 2 – Core is now $139.99 and the full Elite Series 2 is $199.99. The Xbox Wireless Headset rises to $119.99, and the Stereo Headset to $64.99. These increases extend internationally, with European and UK gamers seeing the 1TB Series X at €599.99 / £499.99 and the 512GB Series S at €349.99 / £299.99, respectively.
Industry Pricing and Tariff Headwinds
The planned $10 increase for some first-party games, bringing them to $79.99, mirrors pricing strategies seen from competitors like Nintendo for its top Switch 2 launch titles. Sony also adjusted its hardware costs last month, raising PS5 prices in Europe and the UK in April 2025. Microsoft previously increased the Series X price in June 2023 and adjusted Game Pass tiers and prices in 2024.
This latest round comes despite Microsoft reporting strong Q3 2025 earnings just yesterday; CEO Satya Nadella highlighted on the earnings call that Microsoft “ended the quarter as the top publisher by preorders and preinstalls on both Xbox and PlayStation Store,” alongside noting a 45 percent jump in PC Game Pass revenue year-over-year.
The backdrop to these adjustments is a turbulent trade policy environment. The Trump administration announced new tariffs on April 2nd, 2025, derived from a formula some compared to AI chatbot output, establishing a 10% baseline global tariff effective April 5th and adding higher reciprocal tariffs on goods from countries like China and India effective April 9th.
Although a 90-day pause on many reciprocal tariff hikes (excluding China’s) began April 10th, the baseline rates and specific actions, like the May 2nd elimination of the $800 de minimis threshold for imports from China and Hong Kong, have created operational friction. The administration linked the de minimis closure to combating fentanyl flows and addressing retailer complaints.
This low-value shipment exemption previously allowed approximately 4 million packages daily to enter the US duty-free. Wedbush analyst Dan Ives characterized the situation in mid-April as creating “massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand.” The vast majority of Xbox console production occurs in China, leaving Microsoft particularly exposed to these specific levies.
Ripple Effects Across the Tech Sector
Microsoft is not alone in navigating these challenges. Apple CEO Tim Cook spoke with Commerce Secretary Howard Lutnick in early April over tariff concerns for iPhones, especially after confusing administration messages about potential exemptions. Apple took preemptive action in late March, airlifting products from China and India (nearly half reportedly from India) to avoid the impending duties, with analysts suggesting tariffs could cost Apple up to $40 billion.
Other major retailers like Temu and Shein began explicitly adding “import charges” or raising prices on their platforms around April 25th. Amazon, after facing White House criticism over reports it might display tariff costs, denied such plans for its main site on April 29th but acknowledged expecting third-party sellers to pass tariff costs to consumers. The European Union has also voiced objections to the US tariff policies.
Consumers and Supply Chains Under Strain
The prospect of higher prices spurred action beyond corporate boardrooms. Reports surfaced in early April of consumers rushing to buy iPhones before potential tariff-related price hikes.
An April 8th Reuters/Ipsos poll found 73% of Americans expected the tariffs to raise consumer prices. Small online sellers sourcing goods from China reported facing significant price increases or difficulties finding alternative suppliers following the de minimis rule elimination. Kelly Kendall, a craft kit seller, told The New York Times, “I don’t think people understand the larger impact for really small businesses, where this is my main source of income.”
Logistics networks have also felt the strain. DHL temporarily halted high-value (over $800) B2C shipments to the US starting April 21st, citing customs processing delays stemming from rule changes effective April 5th. Canadian shippers also reported disruptions during a brief de minimis suspension test in February, according to company blog posts.
Kensen Wah of Stallion Express advised clients then, “I don’t think it’s safe for businesses to rely on the de minimis now.” Adding another layer, China announced retaliatory tariffs and new export controls on rare earth minerals—vital for electronics components—on April 4th. Key manufacturing partner Foxconn has stated its ability to adapt production plans to navigate tariff changes, suggesting some resilience within complex supply chains.
Manufacturing Realities and Market Pressures
The administration’s parallel push for increased domestic manufacturing faces hurdles cited by industry leaders. Commerce Secretary Lutnick painted a picture of automated American factories taking over tasks like iPhone assembly, stating on CBS’s Face the Nation on April 6th, “The army of millions and millions of humans screwing in little, little screws to make iPhones, that kind of thing is going to come to America, it’s going to be automated…”
However, Apple’s Tim Cook highlighted the disparity in specialized labor back in 2017, particularly the lack of tooling engineers compared to China: “In the U.S., you could have a meeting of tooling engineers, and I’m not sure we could fill the room — in China you could fill multiple football fields.”
This skills gap presents a challenge to rapidly shifting complex electronics production stateside, a point Steve Jobs reportedly made years earlier to President Obama regarding the necessary workforce scale, stating, “You can’t find that many in America to hire.”
Dan Ives of Wedbush previously described the potential tariff impact on high-end iPhones as a “Category 5 price storm” and called near-term US iPhone production “a non-starter,” estimating costs could push prices over $3,000 and that such a shift likely couldn’t occur before 2028.
