Why Microsoft shouldn’t follow the PS5 price hike

Video game consoles are already an expensive purchase. But unfortunately, there seems to be a worrying trend that could make them even more expensive. On August 25, 2022, Sony announced plans to increase the price of PS5 consoles in various markets around the world.

Microsoft acknowledged this fact but assured customers that there were no plans to increase the cost of Xbox consoles or games in the near future. This is a relief for many gamers and a very wise decision on Microsoft’s part.

What is the reason for the increase in the price of the PS5?

Going by past trends, customers might have expected the price of the PlayStation 5 to decrease over time. Three years after the release of the PlayStation 3, its price has dropped by $100. Likewise, the retail price of the PlayStation 4 dropped by $50 just two years after its release.

But just two years after the launch of the PlayStation 5, its price has increased. This is an unprecedented move, which Sony says is a direct response to the current economic climate as the world recovers from the COVID-19 pandemic.

Sony announced on August 25, 2022 on the PlayStation Blog that the price of the PS5 would be increased in certain markets in Europe, the Middle East, Africa, Asia-Pacific, Latin America and Canada. Fortunately, the North American market has not been affected by this price increase…for now, at least.

Thankfully, Microsoft has reassured Xbox gamers that they needn’t worry about a price hike for any of its products. This is a great move for Microsoft from a business perspective for several reasons.

Maintaining a stable price makes Microsoft consoles more competitive

The console war is a silent battle that has been raging for years between the major players in the video game industry. Every company fights for the top spot in the market. And by keeping their console price low, Xbox consoles become more competitive in this market.

There are many variables to consider when making a major purchase, such as adding a new video game console to your collection. One of the main variables to consider is price. As the price of the PlayStation 5 increases, while the cost of the Xbox Series X|S stays the same, an Xbox console suddenly becomes a much better deal.

Choosing between an Xbox Series X and a PS5 is a tough decision. But by keeping the cost of the Xbox Series X|S stable, Microsoft is gaining an edge over its competitors.

Price stability boosts consumer confidence

Some people don’t like change, especially when it costs them more hard-earned money. By keeping the Xbox price stable, customers know exactly what to expect. When customers feel comfortable in their expectations of a brand, trust builds.

Trust is important in any relationship, and the same is true when it comes to the relationship between a brand and its customers. By keeping Xbox at the same retail price as it always has been, Microsoft can maintain its reputation as a reliable and trustworthy brand.

Xbox Series S would lose its cheapest console status if Microsoft raises its price

The astronomical rise in inflation and economic instability caused by the pandemic has not only affected Sony, but everyone. Including all Xbox and Sony customers.

In the current context, the three main competitors in the video game market are Sony, Xbox and Nintendo. Compared to Nintendo and Sony’s latest consoles, the PS5 and Nintendo Switch OLED, the Xbox Series S currently wears the crown of the cheapest game console on the market. This is a very advantageous position.

The Xbox Series X|S already offers some of the most advanced specs of any gaming console. The fact that the Xbox Series S is also the cheapest makes it very attractive to buy.

Trying to decide whether to buy the Xbox Series S or the Xbox Series X is the hardest decision any Xbox gamer will ever have to make. But it’s hard to argue with the price of the Xbox Series S.

Companies don’t make money on the consoles themselves

Most companies incur losses while manufacturing and selling these game consoles. This cost is then offset by game sales.

By raising the price of the Xbox Series X|S, it’s more than likely that Microsoft will recoup only a tiny percentage of that price as profit. The company would be much better off working on improving Xbox Game Pass and creating console-exclusive titles for customers to purchase.

Using an Xbox Controller

But do not panic ! That doesn’t mean Microsoft is going to make its games more expensive to compensate for inflation and economic hardship. Microsoft has yet to increase the price of its games to $70, and there are no indications that it plans to do so.

Microsoft is one step ahead of the competition by not participating in price increases.

The console war is a battle that will most likely rage forever. But by refusing to increase the price of the Xbox Series S|X and its games, Microsoft could find itself at the top of the rankings.

Xbox fans can rest assured that the price of their favorite console and games will always remain stable. And thankfully, the crown Xbox wears as the cheapest next-gen console doesn’t seem to be going away anytime soon.

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