XBox Series S/X Getting Another Price Increase (Tarrifs)

[Pemalite]

EricHiggin said:

Chris Hu said:

Under normal conditions he might be correct but when it comes to prices in the US everything is affected by the massive illegal tariffs implemented by Trump no matter how mass-produced they are. All consumer goods have seen an increase in prices due to the tariffs.

Tariffs are going to add some cost, but nothing compared to the savings of mass manufacturing. This is part of the reason why PS5 can remain cheaper. They're still having parts mass manufactured for them due to strong sales, so the pricing for those PS5 parts remains very low.

Non mass manufacturing vs mass manufacturing, can cut the cost of parts for a product in half. Now MS shouldn't be facing quite a doubling in price due to far less parts being needed because of very poor sales, but it's going to be considerably more expensive than it was back when XB Series sales were decent.

The biggest cost is Tariffs.
The average Tariff Rate in China stands at 57.6%.

Microsoft gets the Xbox Series components manufactured in Taiwan, China, South Korea and other countries, which are ALL Tariff-free as they aren't imported into the USA.
However we also need to remember that the Microprocessor inside the Xbox Series X is faster and is larger than the Playstation 5 and thus is more expensive to manufacture.

However Microsoft get's it's consoles assembled by Foxconn in China... With plans to eventually move to Vietnam if I remember correctly... Which after assembly Microsoft then imports directly into the USA where it's slammed with a chunky Tariff.
Sony dual-assembles it's consoles in Japan and China, but Sony is a unique position where it can ship Japanese assembled consoles to the USA where it is hit with a lower Tariff rate and ship chinese consoles elsewhere which are Tariff free.

American Tariffs are a tax on imports to the USA. Only Americans pay for American Tariffs.
The biggest cost is definitely Tariffs in the USA.

Other nations aren't being hit by the same price rises.

And Sony having made the right choices with chip size, assembly locations and more, can undercut Microsoft on cost.

It's pretty ironic that Donald Trump in his ATTEMPT at being "America first" is actually damaging an American product more than a product from an overseas company... But the American people voted and asked for this, no sympathy from me here.

******

However we need to keep things in perspective that the trade war is very dynamic and things can shift at any time... Trump only has to announce a higher Tariff rate on Japan for Microsoft to gain a pricing advantage. (Unlikely, but Trump is very unpredictable and stupid.)

There is also RAM and NAND price increases coming thanks to arbitrary price rises, lack of supply (Due to cutting manufacturing earlier in the year) and the A.I. Boom which is gobbling up RAM and NAND at an unprecedented rate.

The shining light in all of this is that Sony and Microsoft manufactures the Playstation 5 and Xbox Series consoles on the TSMC 6nm process which is old and less congested than class leading processes like 4nm or 3nm nodes, which has kept those component cost increases pretty minimal.

Next gen? TSMC is raising prices on it's leading edge nodes, so chips will need to be smaller or expect to pay a higher price.