Microsoft raises Xbox prices by up to 43%
theverge.com65 points by BlueBerry2001 2 hours ago
65 points by BlueBerry2001 2 hours ago
The Era of the Gamecube, Xbox, and PS2 will forever be the best in terms of consumer value and choice and commitment to quality, followed by the Xbox360 Ps3 gen....Its been boiling the frog since end of PS4 and on, but I got out of the water by the PS5...xbox was boiled long ago and were the first to turn up the temp
We shouldn't ever forget the sweet spot of the Game Boy Advance SP (proudly exclaimed "plays all games" on its box, and that wasn't a lie) and the original model of the PS3 which had full BC for every previous generation.
It's such a shame how far things have fallen since. The Switch 2 is an amicable modern day effort, but still, the industry has gotten much pricklier for the average consumer. Not to mention prices that will irreparably damage the scene.
The best part is that the era isn't gone; you can buy those and the games, and it's not even an expensive hobby. And people also know how to / can repair them.
We had a pretty good run there from NES onwards. Today the state of the games industry is weird - It was the best of times, it was the worst of times
I really don't get what MS is doing here. They claim they care about Xbox, that they're going to turn the ship around, yet they cluelessly and carelessly laid off most of their best staff, all while raising prices multiple times and still not producing a coherent future roadmap.
Any consumer or customer would look at this behavior pattern and think they are far too unstable to put their trust into.
At this point it's time to call it for Xbox. I don't think they'll be around in six months time.
The new leadership that was installed clearly has no idea what they’re doing. I get the sense they’re just trying not to get fired. Asha had no games industry experience coming in.
They were also dealt a pretty bad hand with the humongous Activision acquisition and a pretty poor slate of games year over year basically since the start of Covid.
I get the impression from Xbox and Sony that they are oblivious to the fact that they are killing the console. You no longer own the games you purchase. Rather, it's a license for a game (or movie) that can be taken away at any moment, and they want you to be okay with that. Prices are increasing with the excuse of the RAMpocalypse, but the hardware upgrades between the generations are minimnal.
Okay. Vent over.
bizarrely self-destructive behavior from XBox. they've been shooting themselves in the foot for years; apparently they've decided to exchange the gun for a flamethrower in hopes of cauterizing the stump.
The deal was they took everything from you… but at least you could buy electronics for cheap!
Now they don’t even let you have that.
Yeah, they've been explaining away inflation for decades by averaging housing with electronics. Yes your rent has tripled, but your TV is also 3 times as big and your gamebox has 1000 times the CPU so really, things have only gotten 2% more expensive, says the CPI calculation.
Now the politicians don't even have that excuse. I suppose they'll have to add AI tokens to CPI. Used to cost $1000 each, now $0.000002 each, average inflation is 2%.
Except they don't even have that because the recent FOMC meeting pretty much admitted inflation is 4% and they don't feel like doing anything to reduce it, but they're definitely committed to reducing it, they swear.
There is a limit on production efficiency, life is full of logistic curves which feel exponential at first until the inflection and leveling off phases.
It's going to hurt when agriculture does not see the efficiency gains it has been receiving for the last century or so. We might be at the inflection or leveling off now.
Ponzi scheme stock market is also relevant here. Productivity will max out if RSI AGI doesn't pan out.
It’s because of the idiocy of p&l tracking. The hardware, store, and games all need to be independently profitable.
Once they are, they all need to be more and more profitable.
Finally when it’s no longer profitable fire half the people and strip it for parts.
They’re already dead, they just don’t know it yet.
They lose money on every dollar they invest overall in xbox as a business. They pretty publicly documented this (which is unusual for Microsoft).
Overall gaming is a dying business. Everyone has a pretty powerful smartphone in their pockets, and there are so many platform vying for attention. AAA gaming is becoming a smaller fraction of the overall gaming pie, so I would expect prices to go up. Mobile gaming usage is up from 42% -> 55% from 2017. Even based on analysis from Steam's data, Indie games are 48% of sales, vs 24% in 2018.
> Overall gaming is a dying business.
What? Both PC and mobile markets are growing by any reasonable metric, and consoles are propelled by stellar Switch 2 sales.
The gaming market is ripe with money, it is total failure on Microsoft side that they failed to capture any of that. Xbox is on life support, and Windows platform tax is captured by Steam, where Valve funnels it into Linux to make its own platform.
I think mobile gaming should really be considered as a completely separate industry. It's not comparable at all.
Sounds like an opportunity then for you to create a competing company that functions the way you feel it should function. If that's what people value, you'll take all the business since you're the only one offering it.
> Sounds like an opportunity then for you to create a competing company that functions the way you feel it should function
Sure, if one has millions and millions in capital. Because why would an investor put a money in my company that works the way it “should” according to me if it produces lower profits as compared to my competitors?
Because buyers choose to spend less money, so if a business comes around that can offer the same product/service at a lower price, the investor will want to own a piece of that business rather than the one that is about to lose buyers.
Right, because we never see investors making decisions that are suboptimal in the long term because they're too focused on short-term gains. Everyone is perfectly rational, and high initial costs have never discouraged anyone from trying to displace an established dominant player; it's purely because the dominant players are perfectly efficient and don't ever try to rent-seek.
I did not claim any of that, so not sure if your reply is misplaced.
It’s an easily observable fact that throughout the previous decades, investors have invested in businesses that reduce profit margins. Amazon being one of the most famous with the slogan “your margin is my opportunity”, but also Walmart, Costco, and other businesses that end up winning because they delivered acceptable products or services at lower prices.
No, my reply was not replaced. You were replaying to a thread where someone was told that they should start a competing business to Microsoft to displace the Xbox, and when the obvious response of how much money was needed to start such a business, you replied with a hand-waved explanation of how investors would be interested if it would eventually lead to a return on investment. You said something that was not technically incorrect in a vacuum but completely ignored the context behind what the person was actually asking, so I was pointing out why your response wasn't particularly relevant or helpful.
I understand that you weren't the one who initially claimed they should start a business, but if you're going to jump into a thread where someone is told something nonsensical and defend the nonsense by ignoring the context, it's reasonable for others to also jump in and call that out.
There are reasons people don't start businesses. Besides all the regulations, there's the constant struggle to pay rent.
You have to be delusional if you think you are in that class that can spin up an xbox competitor
What people value is subject to marketing and long-term manipulation, not to mention a poverty of competition.
At this point, it’s the ExBox :(
With all the other Xbox layoffs, studio shutdowns, price increases, rumors of pulling titles from Steam, what do they still expect from this brand?
Nothing. That’s why they gave it to a young woman with no achievements whatsoever in gaming and no reputation to build off of. Her job is to kill it in a way Satya can save face on so they can finish their push to everything in the cloud.
'No Achievements'? even just on her Wikipedia she has a great run in her career. Also the population seems to like her.
https://en.wikipedia.org/wiki/Asha_Sharma
Bachelor of Science in Management from University of Minnesota
Marketing role at Microsoft 2011-2013 out of college, standard average college grad role.
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There are thousands of more intelligent, harder working, better credentialed, better achieving college grads alone at this point.
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COO of Porch ~2013-2017 - how does one go from a standard marketing role to COO, ok whatever maybe its a smol startup
"After departing Porch, she joined Facebook as VP Product & Engineering for their Messenger and Instagram Direct products."
lmfao - more credence to the fact that most "Product" roles are leeches. VP Product and Engineering at Meta is absolutely crazy at this point in anyones career.
Management Degree -> Marketing Role -> COO of startup (lolwut) -> VP Product/Eng at Meta (cough nepotism? cough)
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COO of Instacart in 2021 LMAO
President of Core AI at Microsoft in February 2024 LMAO
insert "i have no technical ability whatsoever"
While she has some experience, she well may be a total outsider for the assigned role. This is often the case in Satya's Microsoft. Spontaneous program managers from that special village somewhere in the world (nepotism) who have near zero prior participation in the industry (incompetency).
Curious that you focus so much on her gender.
I don’t pretend to know GP’s motives for putting it that way, but if I was going to put on my evil hat and kill off a gaming company/division I’d also put a woman in the hot seat. Not because I think women don’t understand gaming, they do; nor that I think women can’t run successful companies, they do; but because a large chunk of the gaming market is openly misogynistic and would root for the failure outcome I was orchestrating. Hell I’d even throw in some kind of golden parachute deal because that would enflame the trolls even more. People are easy to manipulate, and that’s quite possibly what’s happening here.
I think that is a much more complex plan than I have seen come out of most corporate planning and promotions.
It's like the Ellen Pao era of Reddit. Ellen was a scapegoat put in by the board of directors to soften the impact while they rammed through a lot of unpopular decisions. Then they replaced her with the actual CEO.
He just mentioned her gender.
Twice for no good reason, he didn’t bother to mention the gender or age of the CEO.
I didn't get the impression OP focused on the gender. Is it forbidden to mention a gender if it's female?
Seems to me the one focusing on the gender is you.
I think the point is that if it's irrelevant, why mention it?
Would you have responded similarly if the OP wrote:
> That’s why they gave it to a young man with no achievements whatsoever in gaming and no reputation to build off of
I would have. I think the focus on gender would also have been inappropriate.
I don’t blame them because I don’t know all the variables involved. Neither does the media reporting and we don’t know what a company of their size is going through with prices going up and suppliers being unwilling to sell parts needed to manufacture these things.
I bought a used Xbox one a few years back. I’m not a heavy gamer anymore so I usually buy the previous generation or even two generations ago hardware, get the games I want from eBay and I’m good. And I was looking forward to getting a Series X, but at this point it looks unlikely unless the brand completely tanks and they’re selling them off to get rid of inventory. Otherwise, my Xbox one is going to be worth more in the future than what I paid, and I don’t want that situation for anyone.
I recently purchased an Xbox Series S for ~NZD$180 to re-play GTA4 (and Episodes) as I never got to finish it when it first came out, and to get through all the GTAs before GTA6 comes out.
512GB Series S consoles in NZ are now retailing for close to $1,000. Might have an appreciating asset on my hands!
Xbox is in complete disarray and is imploding. I haven’t owned a PlayStation in decades. If my son’s Xbox Series X (the worst naming ever) suddenly dies, we’ll either switch to PlayStation or build a PC.
Xbox is in complete disarray because none of the people in charge seem like people who have played a single video game ever.
And isn't that just so typical? Every industry right now is headed by money extraction experts, not experts in that industry.
I don't think it's played; it's that idiots brought low-margin businesses into a high-margin enterprise b2b saas company (that exploits a monopoly too) and are shocked that gaming is not going to give you 30% or higher margins. Nintendo is super disciplined and a bad year for Microsoft margin-wise is one of Nintendo's best. If Nintendo can't regularly hit 30% margins, nobody can, and certainly (as you say) people who don't game and don't know a single thing about gaming except speedrunning a tutorial aren't going to do that.
PS5 prices went up 35% in the past 2 years, and PC RAM went 5x. This is a global problem
Isn't playstation going download only way in a year or so, with no physical disks at all?
The majority of gamers don't care. PC has been digital only for decades.
There are a few points to raise here.
Firstly, yes PC is mostly digital only, but there is at least competition between PC gaming marketplaces, which helps to restrict anti-consumer practices like deleting content that gamers have paid for.
Secondly, some of the competitors in the PC gaming space allow for physical backups of installation media, which helps with game preservation. For example, if a game is bought on GOG, the installer is mostly/always one that can be backed up onto physical media.
Thirdly, while it's true most gamers have moved away from physical media, it still has value. For example, second hand games allow for more people to take part in gaming than could otherwise (legally) do so. Taking away physical games won't stop people on low incomes from wanting to game, and is likely to lead to a resurgence in game piracy. Not exactly the outcome game industry leaders are likely to welcome.
I think that’s the really important implied question right now. Mostly everyone already has some form of device to play games on. What happens when they start to die off?
Valve’s gain.
Have you seen the prices of valve’s hardware?
I ordered a steam deck, so I have. I trust Valve to maintain the ecosystem more than I do Microsoft and Xbox, and so that is where I invest my leisure gaming dollars. The cost per year is reasonable considering how long myself and my kids will get value from it. No different from my MacBook Air and other Apple gear I’ll use for a decade.
(price is what you pay, value is what you get)
When did the Xbox start looking like a Braun radio?
sideshow_bob_rakes.gif
For my entire life, I've seen the same cycle.
Microsoft buys something great, optimizes all the good out of it, and then pulls the plug.
Skype, Nokia, GitHub...
Now it's happening to video games.
The thing everyone needs to realize is that Microsoft fundamentally doesn't make anything, they never have.
All they can do is buy low and sell high. Or buy high and sell higher.
They certainly can't lovingly craft games, the way gamers expect.
In fact, I'd go so far as to say that executives hate artists. Go out of their way to fire them.
Look at what's happening to Blizzard & Bethesda under Microsoft. Arguably Blizzard was ruined the moment Activision sunk their claws in. Quality went down, creativity went down, and all so Bobby could buy a new yacht and sail to Epstein's Island.
"Do you guys not have phones?" That's something a manager who was totally out of touch with his audience would say. Not of an artist creating experiences for gamers.
Microsoft wedge micro-transactions into everything, changes game play to emulate games like Candy Crush where gamers have to pay every 30 seconds. Really more slot machines than video games, but to the ghouls running the show they can't tell the difference.
Players like to be amazed, entertained, and it's not a formulaic process. A gamer will never say, "Oh good, I love feeling pressure and being rushed and all I wanted to do was put in more money all along!"
Microsoft has killed support for all these games. Which kills community.
They add things that nobody wants, because they saw someone else doing it. And they keep adding more of these pay to win and collection "buy a new skin" type mechanics.
Anyway this is a straight up rant at this point, but Microsoft buying something is always a sign doom will follow. Just a matter of time. Xbox held out pretty well. But in the last year or three Microsoft has set its sights on ruining every game it has, so it's just a matter of time now before gamers abandon it. I have zero faith Microsoft will find a way to bring an audience back, because they have no idea how to connect with said audience. It's always just going to be, "How much ARR does that game produce? Wow what a great game!"
Same with Google, Oracle, and basically every big company. In gaming, Valve is a holdout for now - maybe they felt burned after getting prosecuted for shoving Steam full of micro transaction gambling and they're laying low for a while.
I think you're right and I think it's because Microsoft behaves a bit like PE.
I'm sure it applies to Xbox too, but I priced out today's PS to the PS1 and it closely follows the inflation rate that M2 has undergone.
M2 expansion is the prime driver of prices, after supply & demand. Normalize SPX, gold/silver, etc, to M2 and see that they all run in fairly horizontal channels. You can even see nominal GDP normalized to M2 having been flat initially and then transitioning into a downward sloped curve for the last few decades.
By normalizing, I mean [in TradingView] doing SYMBOL*23.16*10^12/M2SL (conceptually SYMBOL*M2SL[0]/M2SL). Most important items track close to M2's roughly 6.5%-7% annualized force of interest inflation rate (the quotient of the natural log of the ratio of price now to historical price, over the elapsed time between the prices).
7% inflation (FoI) -> wealth halflife of cash ≈ 10 years.
Reading this made me question my own mental stability.
CPI replaces steak with hamburger or chicken once steak becomes unaffordable. It understates inflation.
He's basically saying the increase in prices has matched the increase in the money supply. Implying that we need to hold politicians accountable for the massive expansion in the money supply. Which is logic that's hard to fault.
Also implying that inflation is under-measured, perhaps deliberately. Which definitely seems true for anyone who's experienced inflation.
Except the increase in prices is not tied to M2 in this case. It's clearly a matter of supply not matching demand, as a result of changes in priorities of computing equipment manufacturers. You don't have to look at M2 to understand that Micron, Samsung and SK Hynix deprioritising DDR memory over HBM for AI data centres has led to the rapid increase in prices for consumer-grade RAM.
Margins for consumer were wider vs HBM before killing Crucial, and still is today. Something else is going on...
Sounds about right.
"Prices double every 10 years" is a fairly standard economics benchmark.
Also known as 7.2% inflation.
Inflation is different.
Rule 72 is nominal prices.
Inflation accounts for a 2026 xbox being significantly more advanced technology than a PS1
Ah, you're right, I did forget to account for the part where the CPU being 1000x as fast means that prices actually fell 99% even though they went up 10x.