Costco removes Xbox consoles represents a significant blow to Microsoft’s retail presence as the warehouse giant confirms it will no longer carry Xbox Series X/S hardware, citing the decision as purely business-related amid Microsoft’s aggressive price increases and declining sales performance. The retailer made the announcement on September 25, 2025, stating “We don’t have any plans going forward to carry an Xbox console” while emphasizing continued strong partnerships with PlayStation and Nintendo that offer “strong deals” for customers seeking gaming hardware.
Costco’s Official Statement and Retail Strategy
Content creator Destin Legarie shared Costco’s direct statement confirming the Xbox removal, with the retailer explicitly stating the decision was business-motivated rather than reflecting any technical or partnership disputes. The company emphasized that while Xbox products are being discontinued, they maintain “strong deals” on PlayStation 5 and Nintendo Switch hardware, suggesting the decision reflects comparative sales performance and profit margins rather than broader gaming industry retreat.
As the third-largest retailer globally behind Walmart and Amazon, Costco’s Xbox removal significantly reduces Microsoft’s physical retail footprint during the crucial holiday shopping season. The timing proves particularly damaging as October through December historically represent the strongest console sales periods, when reduced retail presence could meaningfully impact hardware adoption and market share growth.
Microsoft’s Aggressive Price Increases Drive Retailer Concerns
The Costco removes Xbox consoles decision closely follows Microsoft’s announcement of substantial price increases affecting Xbox Series X (rising to $649.99) and Series S (increasing to $399.99), representing the second major price hike within six months. These increases occur despite the consoles launching in 2020-2021, when hardware typically becomes cheaper to manufacture over time through production optimization and component cost reductions.
Microsoft attributes the price increases to “changes in the macroeconomic environment,” likely referencing US tariff policies affecting overseas manufacturing, though competitors like Sony and Nintendo have managed similar challenges without equivalent price escalation. The aggressive pricing strategy creates retail challenges as higher prices reduce consumer demand while potentially lowering profit margins for retailers like Costco operating on volume-based business models.
EB Games and Additional Retailer Concerns
The Costco removes Xbox consoles trend extends beyond individual retailer decisions, with reports indicating EB Games Canada is also scaling back Xbox presence through online-only sales of remaining inventory without restocking plans. Australian and New Zealand EB Games locations have reportedly removed Xbox branding from homepages and store displays, suggesting coordinated retail skepticism about Xbox’s commercial viability and customer demand.
These multi-regional retail withdrawals indicate systematic concerns about Xbox hardware performance rather than isolated business disputes. When multiple major retailers across different markets simultaneously reduce Xbox presence, it suggests underlying demand issues that make carrying the hardware financially unviable compared to PlayStation and Nintendo alternatives that continue receiving prominent retail support.
Console Generation Performance Comparison
The broader context surrounding Costco removes Xbox consoles reflects Microsoft’s struggling console generation performance, with PlayStation 5 achieving nearly 80 million units sold compared to Xbox Series X/S’s approximately 42 million units. This nearly 2:1 sales ratio demonstrates clear consumer preference that likely influences retailer decisions about shelf space allocation and inventory investment priorities.
The performance gap becomes more problematic when considering Xbox’s historical dominance in key markets like the United States, where PlayStation 5 has successfully expanded market share despite Xbox’s traditional regional strength. Poor sales performance creates retailer challenges including slower inventory turnover, reduced profit per square foot, and opportunity costs compared to stocking more popular gaming hardware alternatives.
Holiday Shopping Season Impact
The timing of Costco removes Xbox consoles during September creates maximum impact on Microsoft’s crucial holiday shopping season performance, when console sales traditionally peak through November and December promotional periods. Losing access to Costco’s massive customer base during peak buying season could significantly impact Xbox Series X/S adoption rates and overall market share growth.
Costco’s warehouse model attracts budget-conscious consumers seeking bulk purchases and discounted pricing, exactly the demographic most sensitive to Xbox’s recent price increases. Without access to Costco’s competitive pricing and membership discounts, Xbox hardware becomes less accessible to price-sensitive customers who might otherwise consider console purchases during holiday promotions and gift-giving seasons.
Xbox Gift Card and Accessory Implications
Beyond console hardware, the Costco removes Xbox consoles decision extends to related products including Xbox Gift Cards, accessories, and games, creating comprehensive Xbox ecosystem reduction from Costco’s offerings. This broader product elimination suggests the retailer views the entire Xbox ecosystem as underperforming rather than targeting specific hardware categories, indicating systematic commercial concerns about Microsoft’s gaming division.
Xbox Gift Cards historically provided profitable margin opportunities for retailers while driving console ecosystem engagement, making their removal particularly significant for Microsoft’s digital revenue strategies. Without gift card availability at major retailers like Costco, Microsoft loses convenient customer onboarding paths that traditionally drove digital store engagement and long-term ecosystem lock-in through stored value purchases.
Competitive Console Landscape Advantages
While Costco removes Xbox consoles, the retailer continues prominently featuring PlayStation 5 and Nintendo Switch hardware with “strong deals” and dedicated website sections, demonstrating clear preference for competitors based on sales performance and customer demand. This competitive disparity highlights Xbox’s retail challenges when placed alongside more successful gaming platforms in direct comparison scenarios.
PlayStation 5’s continued retail support reflects consistent demand and inventory turnover that justifies retailers’ shelf space investment, while Nintendo Switch maintains evergreen appeal across diverse demographics that support sustained retail partnerships. Xbox’s removal from this competitive landscape suggests Microsoft’s hardware fails to meet retailers’ performance expectations compared to successful alternatives available to gaming customers.
Microsoft’s Strategic Response and Market Position
The Costco removes Xbox consoles development occurs amid Microsoft’s broader strategic pivot toward third-party game publishing and subscription services that de-emphasize hardware exclusivity in favor of software accessibility across multiple platforms. This strategic shift may reduce the company’s concern about individual retailer relationships if hardware sales become less central to overall gaming division success.
However, reduced retail presence still impacts consumer awareness, impulse purchases, and market perception of Xbox’s viability as a gaming platform. When major retailers drop Xbox hardware, it signals market skepticism that could influence consumer purchasing decisions and developer support for the platform, potentially creating negative feedback loops that compound existing market share challenges.
Industry Implications and Market Trends
The broader implications of Costco removes Xbox consoles extend beyond individual retailer decisions to suggest potential industry trends where console manufacturers must prove retail viability through sustained sales performance rather than relying on historical partnerships or brand recognition. Retailers increasingly prioritize data-driven inventory decisions that favor demonstrably successful products over traditional gaming industry relationships.
This performance-based retail approach could pressure console manufacturers to focus more heavily on compelling value propositions, competitive pricing, and customer demand generation rather than assuming retail presence based on brand heritage or industry position. The trend toward retailer selectivity based on sales data rather than partnership loyalty creates new challenges for gaming hardware companies seeking broad market distribution.
Consumer Impact and Alternative Purchasing Options
For consumers affected by Costco removes Xbox consoles, alternative purchasing options remain available through other major retailers including Walmart, Amazon, GameStop, and electronics specialty stores, though potentially without Costco’s competitive pricing and membership benefits. The reduced retail availability could limit consumer exposure to Xbox hardware during casual shopping experiences, potentially impacting impulse purchase opportunities.
The removal particularly affects Costco members who appreciated the retailer’s bulk gaming gift card offerings and electronics warranty programs that provided value-added benefits for console purchases. Without access to Costco’s customer service reputation and return policies, Xbox purchases become less attractive for consumers who valued these additional benefits when making significant electronics investments.
Long-term Xbox Market Viability Questions
The Costco removes Xbox consoles decision raises broader questions about Xbox’s long-term viability in traditional console markets, particularly as Microsoft continues pivoting toward services and multi-platform strategies that may conflict with dedicated hardware promotion. When major retailers question Xbox hardware viability, it suggests market skepticism about Microsoft’s commitment to console gaming beyond current generation obligations.
Industry observers note that Xbox’s strategic focus on Game Pass subscriptions, cloud gaming, and PC integration may reduce emphasis on console hardware success, potentially making retail partnerships less critical to overall gaming division performance. However, reduced hardware presence still impacts ecosystem growth and market perception in ways that could influence Microsoft’s competitive position against Sony and Nintendo’s more traditional console-focused strategies.
Frequently Asked Questions
Why did Costco stop selling Xbox consoles?
Costco confirmed the removal was a “business decision” amid Xbox’s price increases to $649.99 for Series X and poor sales performance compared to PlayStation and Nintendo products, which the retailer continues selling with “strong deals.”
Are other retailers also dropping Xbox consoles?
Yes, EB Games in Canada is reportedly selling existing Xbox stock online without restocking plans, while EB Games in Australia and New Zealand have removed Xbox branding from stores and websites.
When did Xbox prices increase and by how much?
Microsoft raised Xbox Series X prices to $649.99 and Series S to $399.99, representing the second major price hike in six months, citing “macroeconomic environment” changes likely related to tariffs.
Will Costco continue selling PlayStation and Nintendo?
Yes, Costco confirmed they continue carrying PlayStation 5 and Nintendo Switch hardware with “strong deals,” indicating these platforms meet their sales performance and profitability requirements.
How do Xbox sales compare to PlayStation 5?
PlayStation 5 has sold nearly 80 million units while Xbox Series X/S has achieved approximately 42 million units, creating a nearly 2:1 sales ratio that influences retailer stocking decisions.
Does this affect Xbox gift cards and accessories?
Yes, Costco’s Xbox removal extends to gift cards, accessories, and games, representing comprehensive elimination of Xbox-related products from their physical and online stores.
Where can consumers still buy Xbox consoles?
Xbox consoles remain available through Walmart, Amazon, GameStop, and electronics specialty stores, though potentially without Costco’s competitive pricing and membership benefits.
Conclusion
The decision where Costco removes Xbox consoles represents a significant retail vote of no confidence in Microsoft’s current console generation strategy, reflecting systematic performance issues that extend beyond individual retailer preferences to broader market skepticism about Xbox’s commercial viability. As the third-largest global retailer citing “business decision” factors while continuing strong PlayStation and Nintendo partnerships, Costco’s Xbox removal suggests fundamental demand and profitability challenges that Microsoft’s aggressive price increases to $649.99 have only exacerbated. The timing during crucial holiday shopping season, combined with similar moves by EB Games across multiple regions, indicates industry-wide concerns about Xbox hardware performance that could create negative feedback loops affecting consumer perception, developer support, and long-term platform sustainability. While Microsoft’s strategic pivot toward services and multi-platform publishing may reduce direct hardware dependence, the loss of major retail presence during Xbox’s most critical sales period demonstrates how poor console performance and pricing missteps can quickly translate into reduced market access and competitive disadvantage against more successful gaming platforms that continue earning retailer confidence through consistent sales performance and customer demand.