Toni Dimaano Tech 10.28.2022 03:Oct AM EDT

Xbox Faces Possible Price Hike After the Holidays

Xbox Game Pass and Xbox Series consoles could see their prices going up, according to Xbox head Phil Spencer, but not until after the holiday period.

Spencer reveals that Microsoft may opt to increase their prices for consoles and services at the Wall Street Journal's tech Live conference on Wednesday, Polygon writes.

Microsoft Hints At Increasing Their Prices Once The Holiday Shopping Season Is Over

With the inflation crisis affecting the tech industry in recent years, Microsoft may also raise the price of its Xbox games and consoles, following other service operators that already have.

During the conference, Spencer said that the company will not be able to sustain their prices due to industry inflation any longer as manufacturing costs rise as well.

However, the company recognizes the importance of retaining their prices over the holiday season, with the Xbox Series S remaining at $300 and the Xbox Series X costing $500, CNet says.

Connectedly, the companies' in-house games will maintain the cost of as much as $60, and the Xbox Game Pass subscription service is still available at $15 a month.

According to Spence, the possible price hike after the holidays comes after Sony raised their prices for PlayStation 5 in the United States due to chip shortages in 2022, Polygon writes.

Should Microsoft increase their prices, it will be the latest company in the series of giants that upped their costs over the couple of months such as Apple, Netflix, Spotify, and Youtube.

Head of Xbox Spencer says that the hardware sales are not expected to bring in profit for the company, but it can see its Xbox Games Pass subscription profitable, CNet notes.

Xbox's Price Hike May Come Due To A Revenue Increase Following A Market Decline

Microsoft's 2023 Q1 report shows that the tech giant's revenue increased by 11% while its net income fell by 14%, meaning that the company's profit was not good.

MS Power User writes that this is due to the continued deterioration of the PC market and the decline in the company's sales due to the industry inflation.

Microsoft says that the company's financial statistics can worsen in the next year, which is why they are looking into different strategies to increase profits.

In connection to these business statistics, Microsofts' gaming grew a small revenue, with the Xbox division having an overall 4% increase, though the game content and services revenue fell by 3%.

Despite this, Microsoft reports that Xbox Cloud Gaming can still grow as proved by last year's streamer population doubling from 10 million to 20 million.

While Microsoft believes that building up Xbox for mobile in the gaming stores can bring in profit for the company, executives still believe that it might be necessary to raise their Xbox prices to get good stats.

This hint at a price hike at the Wall Street Journal Tech Live conference comes as a bit of a surprise for those who follow Microsoft as the company has previously said that their prices will not be moving.

However, MS Power User reports that the company cites that the cloud provision might be affected by the increase in energy cost in Europe that could amount to up to $800 million.

This would have been too much for Microsoft to pay off in the future, considering the dramatic drop it suffered in the market.