Xbox price rise for consoles and games confirmed as Xbox Game Pass subscriptions plateau-GameCentral-Entertainment – Metro

A price rise is a question of when, not if (pic: Microsoft)

Microsoft has admitted that it will have to raise the price of its consoles, games, and subscriptions but not until after this Christmas.

For years, the two long-held assumptions about Xbox Game Pass is that Microsoft loses money on it and that it’s too good to be true, and so will see an inevitable price rise. Xbox boss Phil Spencer has now confirmed that only one of those things is true.

He didn’t go into much detail, but he did reveal that Game Pass is 10 to 15% of overall Xbox revenue and that it is profitable. However, he also revealed that growth on consoles has slowed down.

Speaking at the WSJ Tech Live event, his most worrying comment for gamers was the prospect of price rises for hardware, software, and subscriptions. ‘I think at some point we’ll have to raise the prices on certain things, but going into the holiday we thought it was important to maintain the prices,’ he said.

Spencer avoided saying anything too specific but speaking at the Wall Street Journal event he was asked about the prospect of raising the price of the Xbox consoles and charging the same $70/£70 for high profile games that Sony already does.

That’s what the above quote was in reply to, implying that both sets of price increases would happen sometime next year.

‘We’ve held price on our console, we’ve held price on games… and our subscription. I don’t think we’ll be able to do that forever,’ said Spencer, according to The Verge’s Tom Warren. ‘I do think at some point we’ll have to raise some prices on certain things…’

Sony has already increased the price of the PlayStation 5 everywhere except the US and while Microsoft and Nintendo did not, it seems they may only have delayed the inevitable.

In August, the PlayStation 5 raised its price by £30 to £480 and it seems likely that Microsoft would increase the Xbox by a similar amount, since they’re already using Sony’s game prices as a point of reference.

“We’ve held price on our console, we’ve held price on games… and our subscription. I don’t think we’ll be able to do that forever. I do think at some point we’ll have to raise some prices on certain things…” pic.twitter.com/jRt5ifKpE5

— Tom Warren (@tomwarren) October 26, 2022

It’s hard to guess what Game Pass prices may increase by though, as there’s still nothing else quite like it in the games industry.

Spencer did admit, though, that growth for Game Pass on Xbox had begun to plateau, saying: ‘I’ve seen growth slow down, mainly because at some point you’ve reached everybody on console that wants to subscribe.’

Since that has been enough to turn the service profitable though, and Game Pass on PC is apparently still showing ‘incredible growth’, Microsoft may not see this as much of a negative.

Although Microsoft refuses to reveal console sales numbers for the Xbox, a monopolies report by the UK’s Competition and Markets Authority (CMA), made as part of the ongoing Activision Blizzard acquisition, recently revealed that the Xbox Series X and S has sold 63 million consoles worldwide.

In January it was announced that Game Pass has over 25 million subscribers, suggesting that around 40% of Xbox owners have also subscribed to Game Pass – although many of those are likely to have been via Microsoft’s popular £1 deals and other discounts.

If console subscription growth is slowing though, that will undoubtedly see Microsoft concentrate more on cloud gaming, which it sees as a way to reach audiences that do not own a console or gaming PC.

That’s despite the fact that Microsoft recently described game streaming to the CMA as technology in ‘its infancy and unproven as a consumer proposition’.

Phil Spencer also says Xbox Game Pass on console has slowed down.

“We’re seeing incredibly growth on PC… on console I’ve seen growth slow down, mainly because at some point you’ve reached everybody on console that wants to subscribe.”

2/2

— Tom Warren (@tomwarren) October 26, 2022

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