Xbox boss Phil Spencer said Microsoft does not plan to raise the price of its flagship consoles in the near future, but has not ruled out a price increase in the future.
After Sony raised the price of the PS5 last month in response to rising manufacturing costs, consumers wonder if Microsoft will follow suit. Talking to CNBC (opens in new tab) in a recent interview, Spencer confirmed that while the tech giant has no plans to do so at the moment, that could change.
“We’re always evaluating our business going forward, so I don’t think we can ever say we’ll never do something,” Spencer said.
“I can say with certainty that we have no plans today to increase the price of our consoles. At a time when customers are more economically challenged and uncertain than ever before, we don’t think it’s the right decision for us at this time to raise prices on our consoles.”
A big misstep
Spencer said Xbox’s business model was underpinned by value for money, highlighting the success seen with the digital-only Xbox Series S. An affordable alternative to the Xbox Series X, low-end hardware now accounts for more than half of Xbox sales.
Microsoft will likely want to keep that edge and hope it isn’t interrupted by the global chip shortage that Sony used to excuse the PS5’s price hike. So far, the Xbox Series S has been more resistant to manufacturing shortages than 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 goes up when you buy a cheap membership – the Xbox Series S is one of the most affordable hardware options on the gaming market today. A price increase would be a major misstep for Microsoft, significantly undermining the console’s main selling point.
This is especially true if Nintendo keeps the Nintendo Switch price at the level, as President Shuntaro Furukawa said. Nikkei (opens in new tab) would do last month. For now, Sony is the outsider. Microsoft will make sure to use this to its advantage for as long as possible.