Microsoft is moving the production of its Xbox consoles out of China to reduce costs and the impact of international tariffs.
Sources at Nikkei Asia report that most components, assembly, and production of new equipment will be moved outside the country by 2026, although some production processes may still remain in China.
The decision follows two Xbox price increases this year—in May and October. The measures are aimed at offsetting tariffs: Microsoft sells consoles with minimal profit, and in some cases, at a loss. As a result, the price of the Xbox Series X has risen to $650, which is 30% higher than the starting price.
According to sources, the company's plan covers both parts and components, as well as the assembly of new devices—laptops, servers, and game consoles. Microsoft expects that by 2026, production will be completely out of China.
The company's goal is to make production more profitable and sustainable, which is critical for the future of Xbox.
