Microsoft is raising prices on Xbox consoles, controllers, headsets, and some games. The price hike for consoles and accessories kicks in today, May 1, and while game prices will stay the same for now, we should expect to see Xbox charging $79.99 for new, first-party games around the holiday season.
If your competitor is forced to raise prices 10%, why wouldn’t you raise prices 8/9/10%?
Anyone that’s taken an AP history class knew tariffs don’t work to help the economy — it’s a tax on all of us and only raises all prices.
You might not buy a €600 Xbox when the Switch is €250, but it looks more attractive when the Swich is €470
zero competitors are forced to raise prices 10% in europe, though
it’s a console launched 5 years ago with no new revision, it was unattractive for €500 in 2020 and it’s even more unattractive for €600 in 2025, if they want to move more units they should lower the prices, not increase them. With this price people can get a real PC with better performance, where you don’t need to pay a subscription to play online. And there are no cool “must have” exclusives like the ps5 or the switch, so the premium is not justified.
This depends on the markets. For example, if prices in the US raised 50% due to Tariffs, then they might lose one of their largest markets, but if they can raise them 10% globally, then they can potentially limit that loss and still have a chance (as much as possible anyway) in all of their markets.
Either way, they need to raise prices because their costs have gone up. It’s a question of where that money is coming from, and how they can reduce its impact on them as much as possible.
There’s about a zero percent chance that 5 year old console components cost more today than they did 5 years ago.
Things like that don’t get more expensive, they get cheaper as new tech develops.
When you tariff them by over 100% of their value, they tend to cost more to import.
My whole comment was on the tariffs specifically, and there is a 100% chance they affect sales in the US. Even with cost reductions in manufacturing over the total lifetime of the console, there’s no chance they cut costs enough to keep up with the tariffs, and there is no chance they planned for the tariffs to be this high in their planning.
Outside the US? These tariffs aren’t applied, but raising the prices globally limits the impact of them on one of their largest markets since they can amortize the cost across all their markets instead of just one.
Yes and no. Most of the cost-reductions in hardware manufacturing lifecycles come from minimizing materials loss and optimizing design efficiency. The components don’t actually just get cheaper to produce over time on their own, from a material perspective. That means that material shortages are much more likely to have a big impact on cost (up or down) than new manufacturing technology, for the same chip.