The Dawn of $80 Games
XBox is following in Nintendo’s footsteps by announcing a major price increase on its entire game portfolio, except for Game Pass. This includes rising prices for consoles, controllers, and accessories, with some first-party titles set to debut at $80 later this year. While this may seem detrimental to sales, it actually positions Xbox to aggressively promote Game Pass.
New Pricing Structure
In a recent update on its support site, Microsoft outlined a revised pricing structure effective Thursday, May 1. The price for various Xbox consoles will increase, with the 512GB Xbox Series S rising from $300 to $380, and the 1TB variant from $350 to $430. The Digital Xbox Series X will now retail at $550, up from $450, and the model with an optical drive will increase to $600, a $100 jump from its previous $500 price. There’s also a price hike for the Xbox Series X Galaxy Black Special Edition with a 2TB SSD, which will now sell for $730, compared to its earlier price of $600.
Rising Accessory Costs
Additionally, the Xbox Wireless Controller is now priced at $65, while the Xbox Elite Series 2 controller has increased to $150 from $145. The official Xbox Wireless Headset will now cost $120, a $10 increase. Similar price adjustments will occur outside the United States as well.
Impending First-Party Game Price Increase
According to Xbox, first-party games are expected to reach the $80 mark this holiday season, making Microsoft the first major publisher to implement a price hike since Nintendo raised prices for its first-party Switch 2 titles. It is anticipated that other major publishers may follow suit soon.
Market Conditions and Inflation Considerations
In a statement on their support page, Microsoft acknowledged the challenges posed by these changes while justifying them based on market conditions and escalating development costs. Although Xbox cites market factors, concerns about game pricing have been brewing for years, as many publishers feel the current prices haven’t kept pace with inflation. For example, Halo: Combat Evolved was priced at $50 in 2001—equivalent to around $91 today when adjusted for inflation.
The Future of Xbox Game Pass
Xbox Game Pass remains the only service that will see no price increases. Following adjustments last year, including tier price hikes and removing day-one games for the lower-priced console tier, the upcoming expensive games could make Game Pass even more appealing. Yet, Microsoft retains the option to alter these policies in the future.
Embracing a Service Model
Microsoft is positioning Game Pass as the core of its gaming strategy, moving away from reliance on hardware to drive exclusive titles. This month, previously exclusive games like Forza Horizon 5 have made their way to PlayStation 5, with Xbox head Phil Spencer stating he would consider putting Game Pass on Nintendo and Sony platforms if given the chance. Microsoft’s recent Q3 earnings report showed a decline in Xbox hardware sales, while revenue from gaming services, particularly Game Pass, grew by 8% year-over-year. Consequently, Microsoft views Xbox as a service model, shifting away from hardware dependence, which will drive more users toward Game Pass.
