I've read the full thread now.
You sound like a lovely mum who has been through the mill a lot. You are in a hard place right now and especially with your MH problems.
I would still take the Xbox and games back for a full refund. I would tell him too that it was because of his disgraceful and ungrateful behaviour, which was totally and utterly unacceptable.
Telling him to just get a job is often not realistic, as it is often only stuff like paper rounds available at that age, and availability can be sporadic (mine were very lucky to get paper rounds, and it took time). I would still tell him that he has blown his chances of any such a gift from you and will now have to wait (years if necessary) until he can pay for it himself.
He has behaved very badly, and sometimes learning the hard way is the only answer.
I'd agree too that spending £500 on a birthday present is madness. Especially as it has left you without money to feed your family.About £50 per child would be more than adequate. You really can't afford it.
Set that sort of a budget going forward. Tell them all, including him, and make sure they understand that it is the only sustainable way forward and they need to understand that.