Speaking today at a Wall Street Journal event in Southern California, Microsoft Gaming CEO Phil Spencer said he thinks prices for certain Xbox products or services will go up, but not until after the holidays.
“I think at some point we’re going to have to raise prices on certain things, but before this holiday we thought it was important to keep prices down,” Spencer told the audience, as broadcast by Tom Warren of The Verge.
Apparently, Spencer was speaking generally about Xbox price increases and not about any specific product or service. But people assume he’s referring to possible price increases for Xbox consoles or services like Xbox Game Pass.
The prices of subscription services throughout the world of entertainment are increasing regularly:Disney+ is the latest to see a price hike, rising to $11/month in December. Netflix, Hulu and others also raise prices from time to time.
If it’s a price increase for the upcoming Xbox console, that wouldn’t be too surprising either. Logistics and supply chain issues have increased production costs, and Microsoft could decide to pass the costs on to the consumer with a price increase. Sony did this with their recent PS5 price increase in certain regions.
In August, after Sony raised the price of the PS5, Microsoft said it was “constantly evaluating” your business regarding pricing, but the existing US MSRPs for the Series S ($300 USD) and Series X ($500) will remain in effect for now. However, the company never strictly ruled out a price increase in the future.
Not raising prices until after the holidays is apparently a strategic decision on Microsoft’s part to help the Xbox platform stand out even more as a cheaper option for people new to gaming. After all, the real money in games comes from software and servicesSo even if profit margins on Xbox consoles take a hit due to supply chain and logistics issues, software and services revenue could help fill the gap.
Microsoft’s Xbox division is riding high right now. xbox made more money in the last three months than ever during a different period than the first quarter in the company’s 20-year history.
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