Why Is the Xbox Series X So Expensive? [Explained]

Why Is the Xbox Series X So Expensive

The Xbox Series X offers 4K gaming and some of the best performance for any console, but the price doesn’t seem to be budging even though the console has been out for some time. So why is the Xbox Series X so expensive?

The Xbox Series X is expensive due to many factors, primarily a microchip shortage, supply and demand pressures, internal upgrades and other world factors such as cryptocurrency.

Let’s look at the main reasons why the Xbox Series X is so expensive and consider whether any of these will be getting relieved so that the price comes down, as well as what can be done about getting a lower price on the console.

Why Is the Xbox Series X Still So Expensive?

There are many interlinked reasons why the Xbox Series X’s price seems unreasonable, so let’s go through the main ones to get a better understanding of why it is and where the price is headed over the short-, medium- and long-term.

Graphics Power Upgraded

The new standard in gaming is 4K at 60 FPS. This is very hard to achieve on a console and given that the internals can’t be upgraded, future proofing is the name of the game.

To this end, Microsoft has doubled the graphics card processing power to a massive 12 teraflops, fully double that of the previous Xbox.

This guarantees that you can run media running at both, rather than having to choose one or the other (if that!) with the older Xbox. You’ll get not only a 4K Blu-ray player, but a 4K game DVR and streaming device as well as 4K media playback across Netflix and other services.

Finally, this also gives access to the hallowed 120 FPS for some titles, so never again will us console warriors be looked down upon by those snooty PC players.

Memory Upgraded

The Xbox Series X now comes with a terabyte solid-state drive, meaning lightning fast load times.

Additionally, the XBox Series X can have this storage boosted via the port that allows an additional external solid-state drive, giving you more storage space for more games and media.

A solid-state drive means the console and game will load faster in general, and you’ll also be able to pause one game, switch out to something else, and then immediately return to the game without needing to wait on additional loading.

Needed Additional Purchases

You’ll only get the one controller with a new Xbox Series X, which is pretty disappointing given the large range of co-op games available. Even controllers are not that easy to come by, but you’re looking at an extra investment that you perhaps didn’t want to make. 

Further, you’re almost certain to need to buy the extra solid-state drive as one terabyte doesn’t go as far as it used to, considering that the Xbox Series X needs 198 GB for its operating system. 

With modern games taking up anywhere between 30 GB to 100 GB, a few AAA titles later and you’re going to be out of room. 

While this may seem all well and good, the reality is that the additional drive is going to cost almost as much as an Xbox Series S and somewhere around half the price of a standard Xbox Series X.

Further, unlike the PS5, you can’t just use any drive (or even take advantage of the M.2 drive technology), you must use the proprietary Seagate expansion card for those games optimized for the Xbox Series X.

No VR Support

Xbox boss Phil Spencer has stated that they think VR creates too much division among users, so they have decided to not make VR available on the Xbox Series X. This is interesting given that Sony has gone the other way, making exclusive VR experiences.

This means that you’re going to have to purchase some other console or a PC to have a VR experience, meaning your choice to purchase an Xbox if you want to play VR titles is going to force another purchase.

Component Prices

Technology has been getting the short end of the stick for some time, with many events contributing to massive price increases.

There is a lot of politics involved so I won’t go into it, but it is fair to say that the individual components in computer chips have been undergoing some massive disruptions, only exacerbated by the massive demands for the technology from many sectors.

The way to solve these issues is multi-faceted, but mostly involves increasing microchip production, which is not as easy as it may seem, given the massive capital cost and time lag to get a fabrication plant up and running. [1]

Microchip expert Alan Priestley estimates it takes as long as three to four years to fully construct. On top of this, the raw materials to make silicon are also getting harder and harder to come by. [2]

Crypto

While it might be unfair to point out some sectors, the crypto boom saw every single graphics card get sucked up by the big miners since 2017, and the newer cards also had their prices heavily inflated by scalpers.

So a microchip shortage was only exacerbated by a massive push by miners to get their hands on the latest cards.

As the whole process became a bit of a vicious cycle, with miners wanting more cards due to their increasing profits, that caused the GPU shortage to get even worse.

Scalpers

The release of the PS5 and Xbox Series X themselves were also heavily targeted by scalpers, with many using bots to snap up any available order, only to be resold on other websites for massive markups.

Scalpers are able to use computer programs to scan all sites where Xboxes are available, and purchase them before a non-bot can even register that stock is available.

This means you have no hope as a human to outbid these bots, and your only chance of buying an Xbox Series X in this situation is to grab it off another site at three, four or even higher multiples of the retail price.

Supply and Demand

You don’t need to be an economist to sum up the situation in any accurate detail, with the basic fact being that massive demand with limited supply is only going to result in one thing: upward pressure on prices.

The demand since 2020 has also been more resilient than usual, with so many people stuck at home and looking for something to do, and where else but to spend money on the latest and greatest consoles and new game releases?

Supply side factors are also hard to solve. The microchip suppliers were already at capacity years ago, and the events of the last few years have been a double whammy, with supply getting worse and demand skyrocketing.

Improved Heat Dissipation

If you’ve been paying attention, the Xbox has gained an unfortunate reputation as being likely to succumb to heat death. That is one of the reasons why the Xbox Series X is so large, as it is designed as a standing unit to accommodate the large vent on top. 

This standing orientation also tries to take advantage of physics, mainly that heat rises and so can vent out better. These big design changes from the previous designs make for increased design and production costs, although you are getting a better product in the end.

Fan Noise

Another aspect of this move to remove the excess heat is the introduction of several fans. However, fans can be very noisy, as well as rattling the case itself causing further vibration noise. 

While this may seem fine on paper, in reality it can get annoying quickly, not to mention that it makes it very obvious when the console is turned on for those of us who want to play late at night when we should be sleeping.

Thus the Xbox Series X’s design has been designed so that the fans don’t have to run at full bore, lowering the overall noise of the console while still getting great cooling.

However, these are further design changes that have to be mooted, playtested, and modified before making it to the final product, all increasing the cost.

Games

The game library on Sony is arguably larger than Microsoft’s, and this translates into leverage for the pricing. However, the Game Pass is the big difference between the two major consoles, so you can still expect a lot out of the games library for Xbox. So, here is another reason why Xbox Series seems expensive.

Will Xbox Series X Go Down in Price?

One of the biggest issues with the price of the Xbox Series X (and basically any technology) is the demand outstripping supply.

Microsoft has shown that they have successfully overcome some of these problems, with it being significantly easier to get your hands on a Xbox Series X than a PS5.

Microsoft has come out and stated that they have been working on many logistical solutions to get stock out quicker, and also working closer with retailers to ensure that any purchasers are legitimate rather than bots buying up any available stock.

The success in dealing with the scalping issue is a large reason why Xbox Series X consoles are more widely available and cheaper.

This also involves making chips available so that this bottleneck has been ameliorated somewhat. Microsoft has stayed silent on exactly how they have achieved this.

Considering it takes about two years and hundreds of millions if not billions of dollars to build a microchip fabrication plant, these types of manufacturing can’t just be added on easily. However, Microsoft made a massive investment back in April 2021 in chip production.

This has paid off handsomely, as the Xbox Series X is now outselling the PS5 and also, along with the Series S, became the fastest selling console for Microsoft ever. This is helped by the fact that it is still very hard to get a PS5 from a retail outlet, let alone online.

Getting on top of the scalper issue will definitely put downward pressure on prices. This is arguably not as big an issue with the Xbox Series Xs rather than PS5, but it still has likely put a price premium on the Xbox Series X.

  • Laura is a co-founder of Computer Zilla and an author. Her favorite topics are gaming related, but she is also obsessed with smart home gadgets. Probably that’s why she always says that her favorite pet is her robot vacuum cleaner Nunu.