Xbox is now saying it needs to raise prices, but why?

While Microsoft was pleased not to announce any current plans to increase Xbox-related prices, even though Meta and PlayStation started increasing their asking price for hardware, the focus there was on “current” plans.

Now, in the face of a global recession and ever-rising costs, Phil Spencer says price increases for services like Xbox Game Pass and for Xbox consoles themselves are likely to come. He said so at a recent WSJ live event:

“I think at some point we’ll have to raise prices on certain things, but prior to this holiday we felt it was important to keep prices the same.”

So not a last minute hike for the holidays, but 2023 seems fair game. But what exactly would those price increases look like? Well, we have a few examples to look at.

Talking about the Xbox consoles themselves, we can look at the PS5 price increases that haven’t arrived in the US yet, but in most regions it was about a 10% or $50 price increase for the consoles. For some regions it was even almost 25%, depending on the currency.

So if Microsoft follows suit, it would mean the Xbox Series S could be priced at $350 new versus $300. The Xbox Series X would go from $500 to $550. Again, Sony hasn’t increased prices in the US, and it’s unknown if US-based Microsoft wouldn’t either. Microsoft already has enough problems in international markets where price hikes abroad could cause problems, so the situation might be a little different. But overall I doubt the prices would go up fewer than in $50 increments.

As for Xbox Game Pass, that’s a different story. While Game Pass has had its prices locked almost since its inception, as with all subscription services, that appears to be changing, especially given the current economic conditions. Spencer recently confirmed that Game Pass accounts for 10-15% of Microsoft’s gaming revenue and is profitable, but what if… it was more profitable? Hence a price increase.

Xbox Game Pass alone costs $10 per month. Game Pass Ultimate, which includes Xbox Live, costs $15 per month, although you can get discounts through bundles.

I guess we can use Netflix as a point of comparison here, and I’ll just stick with the “standard” Netflix prices.

• Nov 2010 – $8
• May 2014 – $9
• October 2015 – $10
• October 2017 – $11
• January 2019 – $13
• October 2022 – $16

So yes, Netflix’s price has essentially doubled in just over a decade, though I suspect the service’s content volume has increased a lot more. Yet we can see when price increases take place, they are incremental, like a frog slowly boiling in water.

I wouldn’t expect a price increase of more than $1-2 for Xbox Game Pass, so maybe $12 alone and $17 for Ultimate. I would imagine a huge YouTube Premium hike where they only increased the price by a full five dollars a month. Still, it’s been a big selling point that Xbox Game Pass is sticking to its price point, though we can see these services starting around like this. Netflix left four years short of its first notable price hike. Xbox Game Pass first launched in 2017, so an increase in 2023 would mean an even longer wait, although the scope of what Game Pass is has clearly changed over time. Nevertheless, a price increase after such a long time is by no means a big shock. We’ll see how it most likely manifests next year.

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