Lenovo Warns Memory Prices May Stay High as Xbox Hits $800

Microsoft's latest Xbox price hike comes as Lenovo warns that DRAM and NAND memory prices are unlikely to return to pre-crisis levels. The company stated that higher memory costs could remain for years despite new manufacturing capacity. The warning follows recent hardware price increases by Sony, Microsoft, Nintendo, and Apple.

Lenovo executive director, Martin Hiegl, made the comments during ISC 2026 in Germany.

According to ComputerBase, Hiegl indicated that memory prices would likely "never" return to where they were a year ago. The publication noted the remark was intentionally exaggerated and referred to roughly the next five years rather than permanently.

Microsoft also reported that memory costs have increased by more than 2.5 times this year and could double again by the end of next year. As a result, the Xbox Series X will cost $800 USD and the Series S $500 from Aug 1, 2026.

AI Demand Continues to Reshape the Hardware Market

The memory crunch is widely attributed to artificial intelligence (AI) data centers, where long-term supply agreements continue to tighten the market. Lenovo expects a higher pricing baseline even after new production capacity begins rolling out in 2028.

SK Hynix has also announced plans to triple memory production by 2034 to meet future demand. The same cost pressure has led Sony to raise prices across the PS5 lineup, while Nintendo will increase the Switch 2 price to $500 on Sep 1, 2026. Valve has also confirmed that its Steam Machine will launch above $1K.

Separately, Micron’s Chief Business Officer (CBO), Sumit Sadana, stated the company told some customers that aggressive pricing was "not constructive" because "a lot of the industry investments got shut down in 2023 because of really poor pricing and really poor margins." He did not identify Apple by name. Circana reported that the average selling price of gaming hardware in the U.S. reached $502 in May 2026, up 14% year-over-year (YoY).

During the same month, Xbox recorded its weakest May hardware sales on record, while PlayStation 5 (PS5) unit sales declined 58%. The figures underscore the broader impact of sustained memory costs across the gaming industry.

Disclaimer: Sources used have been machine-translated from German.