Xbox price increases incoming even as GamePass subscriptions grow by 159 percent

Cal Jeffrey

Posts: 3,720   +1,169
Staff member
In context: When next-generation gaming consoles initially hit stores, many players wait a couple of years for the first price dip. This cost reduction is usually supported by minor design changes that reduce the overall manufacturing overhead. This pattern has held for every console release in at least the last 30 years.

As the PlayStation 5 and Xbox Series reach their second birthdays, prospective owners waiting for that first price drop are finding themselves facing price increases instead. In August, Sony bumped the MSRP on the PlayStation 5 by as much as 10 percent in many regions. It blamed current economic pressures, including hyperinflation, on the need to jack up the price. Now, Microsoft is following suit.

Tom Warren reported that this week, Xbox boss Phil Spencer confirmed that price increases are coming. The good news — if you can call it that — is that there is still plenty of time to buy an Xbox before the hike.

"We've held price on our console, we've held price on games... and our subscription," Spencer said during a Wall Street Journal conference. "I don't think we'll be able to do that forever. I do think, at some point, we'll have to raise some prices on certain things, but going into this holiday, we thought it was important to maintain the prices."

News of the potential hikes come on the heels of Microsoft reporting that GamePass is profitable to its expectations and accounts for 15 percent of the Xbox revenue stream. It has also seen GamePass subscriptions for PC increase by 159 percent year over year, with 20 million players streaming games. The growth of console GP subscriptions has slowed but remains positive.

While he did not get into the specifics of a timeline, the context of his statement suggests that we could see the Xbox Series console rise in early 2023. It also indicates that Microsoft is not reserving increases to only its hardware.

Spencer emphasizes the point that Xbox has "held" the prices on all its products and services, which implies possible hikes across the board. This prospect is likely still being deliberated heavily among the company brass and the board of directors. So it's too early to say what offerings are going up or by how much. However, console increases between $20-$50 seem likely and are in line with Sony's move.

For those still waiting for a price dip, it looks like the best chance to get a current-generation Xbox is to wait until the holiday sales start. They may or may not go on sale, but it seems like the only chance because next year, they will likely cost more than they do now. At least Microsoft is giving buyers ample notice, whereas Sony made its increases "effective immediately" upon announcement.

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NeoMorpheus

Posts: 1,502   +3,248
Xbox price increases coming even as GamePass subscriber base grows by 159 percent

Some times, these titles are just......

One, he didnt say that Xbox hardware would get a price increase.

Two, unless something change, hardware has historically gone down, not up (except Sony, but they know that they have a rabid cult following them, so they are fleecing them) so if they are smart, they will actually try and reduce the hardware price.

Yeah, I can see games and GamePass going up regardless.

I mean, everyone has increased their prices even though they were already posting record revenues.
 

ZackL04

Posts: 884   +686
Clickbaity article

Def not saying hardware increases

Its def gonna be gamepass.

Probably close the xbox live load up and gamepass ultimate upgrade loophole?
 

Watzupken

Posts: 761   +643
There are 2 reasons why price will increase, be it hardware or software,
1. Rising cost of everything. In particular, the price of fab has not gone down now that the shortage is gone. In fact it has gone up as reported previously due to increasing raw material and power prices. The same can be said with the other components used in the console. And not to mention shipping cost would have also increased.

2. Making up for lost of sale - I think as we can see in the news, a lot of companies are increasing prices because their sales number is tanking or declining. So they will cut headcount and increase prices to make up for the lost in sale.
 

Lounds

Posts: 1,285   +1,241
Game pass has always ran at a loss. Microsoft just bleeds money on game pass to try and win back market share, soon as they do, back to milking them consumers.
 

Cal Jeffrey

Posts: 3,720   +1,169
Staff member
To clear up some confusion:

"Xbox price increases coming even as GamePass subscriber base grows by 159 percent" does not say or mean Xbox Series X|S prices are going up, otherwise we would have gone with something like, "Xbox hardware price increases coming even as GamePass subscriber base grows by 159 percent."

Xbox is a division of Microsoft. Phil Spencer made vague remarks, as stated in the article, implying that price increases are coming. To paraphrase: We (Xbox) have held our prices (of everything), but that cannot continue. We (Xbox) will raise prices on some things. However, we won't do this until after the holiday season.

It could be on the consoles, it could be on the first-party games, it could be on GamePass. These are all products that come under the division of Xbox, so Xbox prices, whatever they are, are more than likely increasing sometime after the holidays.