The ongoing trade wars and rising component costs in the tech world are pushing major companies to seek new solutions. Microsoft has made a critical move to control the price tags of its game consoles. The company is preparing to massively increase its Xbox Vietnam production capacity to mitigate risks.

Record capacity for Xbox Vietnam production

According to official documents obtained by Reuters, Fushan Technology, a subsidiary of its manufacturing partner Foxconn, has taken action. The company has requested permission from authorities to produce 4.8 million Xbox devices annually at its facilities in Vietnam. This massive figure is expected to include not only consoles but also accessories such as controllers and headsets.

Another noteworthy detail in the report concerns the Chinese company Luxshare-ICT. The company plans to produce 4.5 million game consoles annually in Vietnam starting in 2026. While it is not yet clear which brand this production will be for, it is believed that Sony or Nintendo are pursuing a similar strategy.

The appetite for hardware in AI data centers is driving up the prices of critical components such as RAM. With global trade tensions compounded, manufacturing in China is becoming increasingly expensive. By shifting production out of China, Microsoft aims to maintain its game consoles’ greatest advantage: affordability, while remaining competitive with the PC.

So, what are your thoughts on Microsoft’s decision to manufacture Xbox in Vietnam and its pricing strategy? Share your thoughts with us in the comments!