Whether it's Xbox stock supply issues or tariffs triggering price hikes, Xbox Series X|S hardware can't catch a break.
When the United States President Trump kicked off a trade war with China, it caused massive price increases across a variety of products. One business particularly hard hit has been video game consoles — which do not enjoy the same exemptions as other electronics. The United States exempted Apple's iPhones from tariffs for example to protect one of its top national tech businesses. But, it did not extend the same courtesy to the only U.S.-based console player still going: good old Xbox.
Since the Xbox Series X and Xbox Series S launch, Microsoft was strong out of the gate, even beating the PlayStation 5 in U.S. dollar sales (via The Verge and Circana) for a few months. But then, PS5 supplies began surging ahead. Xbox hasn't been able to keep up ever since, with hardware declines posted nearly every quarter for the past couple of years. To make matters worse, it was forced to raise prices a few months ago, making the Xbox Series X, and in some cases, the less powerful Xbox Series S more expensive than some PS5 models. Tariffs have played a huge part in making Xbox Series X|S less competitive.
To avoid these types of price increases, manufacturers like Sony PlayStation and Nintendo have moved some of their hardware production out of China, which has been disproportionately targeted in Trump's tariff blitz. One country that has benefitted from this is Vietnam, which has increasingly started to assert its position in all types of electronics manufacturing. The country can now count Xbox among those.
In a new report from Reuters, electronics manufacturing heavyweights Foxconn and Luxshare have submitted planning proposals to local authorities, aimed specifically at growing their video game console footprint.
Fushan Technology, part of Foxconn, is seeking production permits specifically for Microsoft Xbox gaming devices, the report claims. Fushan aims to scale up to 4.8 million additional Xbox gaming devices as part of the permit, which likely includes Xbox Series X|S consoles, official Xbox controllers, accessories like the official Xbox headset, and possibly even Xbox Cloud Gaming server tech. Do note that this wouldn't include the Xbox Ally handheld — which is produced by ASUS, not Microsoft, despite the branding. China's Luxshare-ICT has also posted proposals to expand its own console manufacturing operation by an additional 4.5 million units per year.
Microsoft has been dividing its Xbox Series X silicon between retail Xbox Series X consoles and Xbox Cloud Gaming servers as it expands capacity in countries like Brazil and India, which also suffer disproportionately from tariffs and taxes inflating Xbox local hardware prices. Microsoft recently said its Xbox Cloud Gaming use had seen a 45% growth rate year-over-year, even as Xbox Series X|S supplies decline.
Xbox is still in the game
One thing I am constantly asked about on social media is whether or not Xbox is "exiting" console hardware. Microsoft has reiterated plans to build a next-gen Xbox console, which is set to be more PC-like than ever with the capability to run Steam and other Windows PC apps and gaming platforms. Another reason people often think Xbox is leaving hardware is Xbox Series X|S stock supplies, which are often difficult to find stocked up in some regions.
Indeed, Microsoft didn't do any Xbox Series X|S deals for Black Friday and Cyber Monday, owing to the stock shortage. Diversifying its supply chain will hopefully help boost Xbox Series X|S production in what could be a pretty huge year for the platform. Although, DRAM supply constraints and price hikes into 2026 could frustrate those efforts for everyone involved.
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For millions of Xbox users still on Xbox One X and Xbox One S consoles — Grand Theft Auto 6 will likely catalyse upgrades in a way not seen since the Xbox Series X|S launched in 2020.
Microsoft can't afford to not have stock available for this rare gaming event, particularly since Grand Theft Auto 6 will be available only on Xbox Series X|S and PS5 at launch. Xbox Series S could be the "cheapest" way to access the game — but only if you can actually find one to purchase.
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