Microsoft considering raising the price of its Xbox games

By Patrick Dane, Tuesday, 17 November 2020 16:17 GMT

As the debate about price points for games rages, Microsoft hints at its position.

Microsoft has alluded that it might consider raising the prices of first-party video games. While coy about its decision for Xbox games, it suggests that higher price-points are justified.

The cost of games is always going to be a hot topic. On one hand, the retail price of AAA games hasn’t fluctuated for generations despite inflation and development costs sky-rocketing. Also, with more flash sales on digital storefronts, cheap games are in abundance. On the other hand, though, microtransactions and season passes are also asking players to continue to pay for the games they are playing.

It’s an argument the industry and consumer are likely rarely going to see eye to eye on.

Well, in terms of Microsoft first-party games, it’s possible we might see the base price going up. Microsoft’s CFO Tim Stuart said during the Jefferies Interactive Entertainment conference (transcribed by Seeking Alpha, via GamesIndustry.biz) that the company is considering a hike. That news isn’t coming yet though. Stuart said, “We’re not making specific announcements on first-party pricing yet. So we’ll do that sort of in due time.”

He did allude to a position though, saying the company will look at competitors. He said: “I think we’ll look at publishers to make the right decision for their content. If they can drive a premium price point or a higher price point, I think that’s warranted. Prices have not gone up in — what, for a couple of generations now, so it’s not unheard of to see things like this going on.”

Stuart cited the increasing development costs of games for a reason that the industry is starting to consider the move. He said: “Games are getting more expensive to create. They’re driving revenue growth as well, and they’re looking for opportunities to go create more monetization for the support of that content creation. And that’s when you see a little bit of the game pricing going up.”

He added: “Content creation costs go up. These publishers and content creators, including ourselves, want to make sure you’re driving the right gross margin profiles, the right earnings profiles of what it takes to build these new, awesome, amazing games.”

Microsoft is not alone in taking a long hard look at the price of games. Both Sony and 2K Games have already defended the cost for next-generation games. With enough movement, that could become standard quickly.

In Microsoft’s favour, it’s worth noting that Game Pass is a way to sidestep a steep barrier to entry. These first-party games will be coming to Game Pass, meaning many consumers won’t be buying Microsoft Studios games at face value. However, this discussion about rising prices as we move into a new generation is unlikely to go away anytime soon.

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