going up
Microsoft’s Xbox head Phil Spencer stated that the company has no immediate plans to increase the cost of its flagship systems, but he did not completely rule it out either.
Customers are speculating as to whether Microsoft would increase its prices in reaction to Sony’s decision to increase the PS5’s pricing last month in response to growing production expenses. While the tech giant doesn’t currently have any plans to do so, Spencer said that may change.
“We’re always evaluating our business going forward, so I don’t think we can ever say on anything that we will never do something,” Spencer said.
“I can definitely say we have no plans today to raise the price of our consoles. In a time when customers are more economically challenged and uncertain than ever, we don’t think it’s the right move for us, at this point, to be raising prices on our consoles.”
A big misstep
Spencer said the Xbox business model was underpinned by value for money, highlighting the success it’s seen with the digital-only Xbox Series S. An affordable alternative to the Xbox Series X, the cut-rate hardware now accounts for over half of Xbox sales.
Microsoft will likely want to keep hold of that advantage, and hope it’s not disrupted by the global chip shortage that Sony’s used to excuse the PS5 price hike. So far, the Xbox Series S has been more resistant to manufacturing shortages than the other current-gen consoles, as its weaker chipset means its components can be sourced and produced more easily.
Combined with the value of Xbox Game Pass which only soars when you grab a subscription at a bargain price – the Xbox Series S is one of the most affordable hardware options on the current gaming market. A price hike would be a big misstep for Microsoft, significantly undermining the console’s primary selling point.
That is especially true if Nintendo maintains the same pricing for the Nintendo Switch, as president Shuntaro Furukawa promised to do last month to Nikkei(opens in new tab). Sony is now the outlier. Microsoft will be eager to take advantage of it for as long as they can.