Phil Spencer, the CEO of Microsoft Gaming, recently stated that Xbox-related price increases are likely coming. As reported by The Verge’s Tom Warren, Spencer said, “I do think at some point we’ll have to raise the prices on certain things, but going into this holiday we thought it was important to maintain the prices. We’ve held price on our console, we’ve held price on games and our subscription. 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.”
While it’s unclear which services are liable for price hikes, the most probable areas for cost increases are first-party games and Game Pass subscription prices. Publishers like Sony, Ubisoft, Activision, and more have started increasing the base cost of AAA games from $60 to $70, and recently released or upcoming titles like God of War Ragnarök, Call of Duty Modern Warfare II, and Gotham Knights embody this trend. Game Pass subscriptions are another likely area for increased rates, as Microsoft has raised the price in the past, and subscription services like Netflix and others tend to gradually escalate what they charge over time.
These price increases come amidst a worldwide wave of inflation brought on by the ongoing Russian invasion of Ukraine, supply chain shortages caused by COVID-19, and other complex factors. In the United States, the inflation rate in September was 8.2% when compared to the previous year.
The biggest question remains whether or not Microsoft will inflate the cost of the new Xbox Series X|S consoles as part of these price hikes. While system cost increases have traditionally been unprecedented, Sony recently increased PlayStation 5 rates in most regions outside the United States, citing global inflation rates as the reason for the change. With global chip shortages seemingly reversing course and important components becoming more available, it remains to be seen if Microsoft’s flagship hardware will become less affordable in the near future.