Microsoft Set to Raise Prices of Series X/S Games in 2023
It’s been a very difficult year in 2022 for a variety of industries due to the aftermath of pandemic-related economic casualties, and it’s also true for gaming. The increase in the money supply has led to a period of inflation that peaked at its highest in over 40 years, and the result has been some carnage. While inflation is transitory, this time around it doesn’t appear to be disappearing rapidly, which will result in some more prolonged suffering. As a result, some gaming companies have been forced to adapt to the changes, causing difficulties in production and sales as well, and it appears that as we turn the calendar over to the start of 2023 that it’s going to continue to be that way in the short-term.
Many gaming companies have been forced to raise prices in the wake of peak inflation, and we’re seeing it with the top ones in the industry. The snowball effect trickles from one industry to another and is essentially unavoidable during these periods of economic turmoil. Although Microsoft is still sitting well as a company, they too are joining in on the price raising, having announced the increase of prices of new, top games from $60 to $70.
Prices will vary depending on the region and country, so this may not be a permanent figure by any means, but the aforementioned price increase specifically applies to the United States to start. This figure applies to games being released for the Xbox Series X/S next-gen consoles, representing a price increase of approximately 17%. At surface level it doesn’t appear to be significant, but it will certainly help their sales numbers considering that the Series X and S models are basically their top consoles at the moment. The real question here is how will consumers respond.
In the current environment, a game priced at $60 is a bit more difficult for consumers to justify purchasing since a lot of people are struggling at the moment, and the price increase to $70 will further accentuate that argument. That being said, most gamers still find a way to get what they like, even if it’s a gift from a friend or family member.
If there is any hit to Microsoft’s gaming sales, it should only be in the very short-term, mainly over the next 6 months, considering that inflation is set to slowly subside as the Federal Reserve announced a decrease in interest rate hikes starting this month in December. Afterwards, a period of deflationary activity usually arises, allowing the prices of goods and services to come back down to earth and be affordable again for the common citizen.
Zooming out from the microscope, one can see the long-term vision of the price increase and that as global conditions improve that sales will still be as strong as ever, along with the fact that the games being released are top-notch and arguably the best on the market, which can mostly justify the $70 price tag. This could very well be foreshadowing though, and an indication that in the future, both games and consoles will continue to get more expensive as graphics and the quality of game development improves.
It’s a tough pill to swallow at the moment for gamers, specifically the younger demographic, since the Series X and S consoles are both already expensive, mainly the Series X. Now, the increase in game prices will force their wallets to take a further hit, but the quality of games has never been in question with the top companies, and that surely includes Microsoft. The only real indicator will be how the market reacts to the increase, and that will be tracked with data and analyzed, especially over the first few months to see if there’s still the same level of interest. If sales drop and interest cools, Microsoft will face a bit of a dilemma regarding what to do about game prices not just for Series X and S, but also for future consoles as well.