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Microsoft raises Xbox prices in U.S. again amid tariff pressures

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Microsoft announced on Friday that it will increase U.S. prices for its Xbox consoles for the second time this year, citing rising costs tied to tariffs and supply chain pressures. The hikes take effect October 3 and will see the Xbox Series S (1TB) priced at about $450, the Series X at $650, and the special edition 2TB Galaxy Black Series X close to $800.

The move follows a May round of price increases across the U.S., Europe, Australia, and the UK. Combined, the Xbox Series X has risen by $150 in six months, straining consumer budgets already squeezed by inflation.

Microsoft said the adjustments reflect “changes in the macroeconomic environment” rather than opportunism. Analysts agreed tariffs are the driving factor. “Hardware is being repriced to absorb new trade pressures,” said Joost van Dreunen, games professor at NYU Stern.

The hikes come as Sony raised U.S. prices on its PlayStation 5 consoles last month, with the PS5 Pro now retailing for $749.99. By contrast, Microsoft said it will not raise prices on controllers, headsets, or hardware in other global markets.

Industry forecasts had expected console sales to drive growth in 2025 alongside major game releases like Grand Theft Auto VI and Nintendo’s anticipated Switch 2. However, repeated price hikes and delayed titles may dampen momentum, clouding the near-term outlook for the video game sector.

Microsoft expands Wisconsin AI data center investment to $7 billion

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Microsoft announced plans to build a second major artificial intelligence data center in Wisconsin, raising its total investment in the state to more than $7 billion. The new $4 billion facility will join a $3.3 billion data center already under construction in Mount Pleasant, Racine County, first unveiled last year.

The initial data center is expected to open in 2026 and employ about 500 people, while the addition of the second will expand staffing to around 800. Microsoft says the combined site will eventually host the world’s most powerful AI supercomputer, linking together hundreds of thousands of Nvidia chips.

The development comes on land once earmarked for Foxconn’s highly publicized $10 billion factory, a project dramatically scaled back after initial political fanfare during Donald Trump’s presidency. When President Joe Biden attended Microsoft’s first announcement last year, he highlighted Foxconn’s retreat as a cautionary tale while framing Microsoft’s plan as a sign of renewed investment.

Microsoft said it will pre-pay for electrical infrastructure to avoid burdening local customers with higher power bills and will use Wisconsin’s cold climate for energy-efficient cooling. Annual water consumption will be capped at roughly the level of an average restaurant. To offset its energy use, the company will also build solar power elsewhere in Wisconsin, though Microsoft President Brad Smith noted new fossil fuel generation—specifically liquefied natural gas—will still be part of the mix.

While the 800 permanent jobs fall short of the thousands promised by Foxconn, Smith emphasized the importance of ongoing skilled labor positions, including pipefitters and electricians, needed for both construction and long-term maintenance.

Microsoft raises Wisconsin data center investment to $7 billion with new AI hub

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Microsoft (MSFT.O) announced Thursday that it will build a second large-scale artificial intelligence data center in Wisconsin, boosting its total investment in the state to more than $7 billion.

The $4 billion facility will be built alongside a $3.3 billion data center in Mount Pleasant, unveiled last year. The first site remains on track to open in 2026, employing about 500 people at its peak. Once the second center is completed, total employment is expected to reach about 800.

Microsoft said the expanded site will ultimately host the world’s most powerful AI supercomputer, linking together hundreds of thousands of Nvidia (NVDA.O) chips.

The Racine County location, between Milwaukee and Chicago, has been a political focal point since former President Donald Trump promoted Foxconn’s plan for a $10 billion factory there—a project later drastically downsized. At the launch of Microsoft’s first data center last year, President Joe Biden pointed to Foxconn’s retreat while emphasizing Microsoft’s long-term commitment.

To support the new project, Microsoft said it will pre-pay for electrical infrastructure to prevent higher utility rates in the region. The company will also deploy a state-of-the-art cooling system that leverages Wisconsin’s cool climate, reducing annual water consumption to that of an average restaurant. Solar power will be built elsewhere in the state to offset the data centers’ electricity use, though Microsoft President Brad Smith acknowledged that new fossil fuel generation, including liquefied natural gas, will also be required.

Smith said while permanent jobs will number in the hundreds, construction will create thousands of positions for skilled workers such as electricians and pipefitters. “All the things that we build need to be operated,” he told Reuters. “It needs to be maintained. These are good jobs.”