Phil Spencer: No Plans to Raise Xbox Price as Customers Are More Economically Challenged - News
by William D'Angelo , posted on 16 September 2022 / 3,531 Views
Sony Interactive Entertainment last month announced it will be increasing the price of the PS5 in select markets, including Europe, UK, Japan, China, Australia, Mexico, Canada, Singapore, Malaysia, Indonesia, Thailand, Philippines, and Vietnam.
Microsoft and Nintendo in a separate statements announced neither company has plans to increase the price of the Xbox Series X|S consoles and Nintendo Switch, respectively.
Microsoft Gaming CEO in an interview with CNBC has reiterated Microsoft won't be increasing the price of the Xbox Series X|S consoles, especially during the uncertain economic times.
"We’re always evaluating our business going forward," said Spencer (via VideoGamesChronicle). "So, I don’t think we can ever say on anything that we will never do something. But when we look at our consoles today, and you talked about it—Series X and Series S—we think value is incredibly important. We love the position of Series S in the market, which is our lower cost console. Over half of our new players that we’re finding are coming in through Series S.
"And I can definitely say we have no plans today to raise the price of our consoles. We think in a time when our 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 console."
$MSFT's @XboxP3 talks #Tencent, #JRPG's, and @discord - and explains why it's not time to follow $SONY's hike in prices. #Xbox #PlayStation pic.twitter.com/BCIY0wE8Gt
— Squawk Asia (@asiasquawkbox) September 16, 2022
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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Sony: Hey MS and Ninty, here's a stick for you to beat us over the head with.
Cool, can he tell energy companies this?
Sony's decision to raise the price was super dumb, especially in Japan where consoles are dying.
Where have you been? consoles are not dying in Japan.... The only console that's dying in Japan is the Sony name brand.
Good to know. I still don't know what came over Sony to raise the price of a console, even if they can't deal with the demand as it is. This is free advertisement for Nintendo and XBox. Though I'm afraid that the raise of the online fees will be the thing that all of them will drift towards, with higher inflation and all, hopefully I'm wrong.
To me, it seems the answer in Sony's case is simply greed. I'm sure Sony would profit tremendously from gaming even without the price hike, but due to being unable to meet the demand, Sony saw a chance to raise the prices. Sony is out there to make business, so this is of course fine, but they certainly lost some goodwill as a result.
Also, Sony might have though Nintendo and Microsoft would follow suit since they're in a similar situation too, but they didn't.
For the players! Oh, wait... wrong company slogan. :D
Nintendo and Xbox in excellent position for the Holidays in helping the consumer's dollars stretch a little further in this global economic catastrophe. Sonys going for your gold teeth and firstborn.
Switch Lite and Xbox Series S are both excellent value propositions that each play all the games available for their respective systems, no question. The PS5 Digital isn't nearly as attractively priced, if you can even find one.
even if its sold at abit of a loss the plan will be to make it back via 30% on the games you buy or from buying gamepass
Spoken like a true true gentleman who sees the signs of the times, unlike his counter part.
Yes, Phil and MSFT are doing this bc they have a genuine concern for individual customers’ financial situations—definitely not bc MSFT has literally more money than they know what to do with, and bc it makes good PR. Also bc they’re still last place.
Nintendo doesn’t have to raise price bc their console is the same price it was 5.5y ago, so they’re profiting substantially from every system sale. Wouldn’t be surprised if they make $75-$100 per system.
Not making excuses for Sony; it just makes logical sense. The majority of everything has increased in price—why wouldn’t a PS5 also?
Still they can easily justify loss on HW to increase marketshare or accelerate GP. Again needing to please shareholders would already make you notice that they aren't doing this out of kindness.
Except if they really wanted to please the shareholders they would increase the price to gain more profits and in turn guarantee higher dividends for the shareholders.
Not as black and white at that.
It's the long term goal of higher install base = More money from games, Subcriptions, DLC, Movies, TV shows, Expansions, Accessories and more.
A higher price would negatively affect the sales rate.
The Series S is a cheaper console to manufacture which likely has lower losses per console sold, which likely reduces the impact of the Series X financially.
So could Sony.
Sure they could. But when they done their projections this was the one that showed biggest profit for them.
Raising or not raising price of the XB Series consoles represents a drop in the ocean, financially, for MSFT. Their 12mo NET income as of 6/30/22 was $73 billion dollars. Hell, their QUARTERLY net income ending 6/30/22 was $17 billion. For reference, Sony’s same numbers are $7.6 and $1.7 billion, respectively. Also, MSFT’s gaming division is toward the bottom when speaking of its most profitable divisions; whereas, gaming is Sony’s largest division.
Gaining market share for XB for larger profits 5, 10, 20y down the road is far more important to them than what represents petty chump change to them now.
They still have to make money and have a sustainable business model.
That's right. XboxXXXXXXXX
It's not going to be that dire for a us-based company that gets most of it's sales from the us. it's more of an issue internationally.
Man, of course not. People saying he is doing this out of the goodness of his heart have green goggles on. If Xbox could compete at the same price point and match the demand, they would not sell them at a loss...
and evidence that it is selling at profit?
This is incorrect and a 1 min google gave me plenty of evidence. The recent AppleEpic lawsuit showed that all MS consoles have been sold at a loss.
Here's a simple fact that proves you wrong:
We have reports (from Sony) that the PS5 digital edition hasn't made a profit at $399..
In Europe, the XboxS usually sells at 269-289 Euros (that even includes tax around 10-20%, and store margin). That's around $280 final price.
Now tell me: if Sony's $399 console sells at a loss, what does the $280 console do?
Their lower priced console is selling more than the higher price model. This interview are for folks that are totally braindead
It has nothing to do with the price of the systems. If the $299 console cost roughly the same to manufacture, then how much it sells doesn't matter. For all we know they could be losing more money on the S than the X.
Evil MS at it again.
Impressive considering they havnt reduced materials and redesigned the XSX model to save on costs (yet) to.
Of course u don't need to raise prices coz Microsoft is literally swimming in money,
Ninty doesn't either coz it's a 5 year old console hybrid it should be getting cheaper not pricier,
As for Sony well,
They think they're number 1 and they are in demand so they will bump it up a notch but just a right amount before they start losing customers
Essay Pro