Microsoft has just dropped a bombshell announcement on gamers worldwide - a significant price increase for Xbox Series X and S consoles. The new prices will take effect from August 1, with the 512GB models soaring by $100 to $500 and the 1TB models jumping by $150 to $600. Unfortunately, the 2TB model is being discontinued. This decision comes as a result of the ongoing "components crisis," which has caused console storage and memory prices to skyrocket by over 2.5 times. Microsoft acknowledges that this move may put a strain on gamers' wallets, but they are offering alternatives like Buy Now, Pay Later options and interest-free financing. They are also working with retailers to make second-hand consoles available at lower prices and promoting 'Certified Refurbished Consoles.' This announcement precedes the highly anticipated release of GTA 6 in November, which is expected to cause a surge in demand for PS5 and Xbox Series X and S. However, there are concerns about whether Sony or Microsoft can meet this increased demand due to the ongoing AI boom and component shortages. The gaming industry is facing unprecedented challenges, with new and existing console prices spiraling upwards. Microsoft's gaming business currently has a 3% accountability margin, down year-on-year, and they are looking to innovate both in hardware and games to make their business sustainable. Xbox CEO Satya Nadella emphasized the need for economic viability, stating that there is more monetization of Xbox games happening on YouTube than at Xbox itself. This price hike could potentially impact various Xbox studios like Ninja Theory, Compulsion Games, and Double Fine, but Microsoft is in the process of a "reset" which may result in significant layoffs.