Why Microsoft Shouldn’t Follow the PS5 Price Hike
Reading Time: 4 minutesSony’s PlayStation 5 price increase shouldn’t be a signal for Microsoft to follow suit with the Xbox Series X|S.
Video game consoles are already a pricey purchase. But unfortunately, it looks like there is a disturbing trend that could make them costlier. On August 25, 2022, Sony announced its plans to raise the price of PS5 consoles in a range of different markets all over the world.
Microsoft acknowledged this but assured customers that there were no plans to increase the cost of Xbox consoles or games any time soon. This is a relief for many gamers and a very wise move by Microsoft.
What Is the PS5 Price Hike All About?
If past trends were anything to go by, customers would have expected the price of the PlayStation 5 to go down over time. Three years after the PlayStation 3 was released, its price went down by $100. Similarly, the retail price of the PlayStation 4 dropped by $50 just two years into its lifespan.
But a mere two years into the PlayStation 5’s lifespan, however, the price has gone up. This is an unprecedented move and one that Sony states is in direct response to the current economic climate as the world recovers from the COVID-19 pandemic.
Sony announced on an August 25, 2022, PlayStation Blog post that the price of the PS5 would be raised in select markets around Europe, the Middle East, Africa, Asia-Pacific, Latin America, and Canada. Thankfully, the North American market has remained untouched by this price hike… for now, at least.
Thankfully, Microsoft put Xbox gamers’ minds to rest by assuring them that they don’t need to fear a price hike for any of their products. This is a great move for Microsoft from a business standpoint for several reasons.
Keeping the Price Stable Makes Microsoft Consoles More Competitive
The console war is a silent battle that has raged on between the top players in the video game industry for years. Each company is fighting for the top spot in the market. And by keeping the price of their console low, Xbox consoles become more competitive within that market.
There are many variables to consider when making a large purchase, like 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 Xbox Series X|S cost remains the same, an Xbox console suddenly becomes a much better deal.
Choosing between an Xbox Series X or a PS5 is a tough decision. But by keeping the cost of the Xbox Series X|S stable, Microsoft gets an edge over its competition.
Stable Pricing Builds Consumer Trust
Some people don’t like change, especially when it costs them more of their hard-earned cash. By keeping the price of the Xbox stable, customers know exactly what to expect. When customers feel comfortable in their expectations of a brand, that builds trust.
Trust is important in any relationship, and it is no different when it comes to the relationship between a brand and its customers. By keeping the Xbox at the same retail price it has always been, Microsoft can retain its reputation as a reliable and trusted brand.
The Xbox Series S Would Lose Its Status as the Cheapest Console if Microsoft Raised Its Price
The astronomical rise in inflation and economic instability caused by the pandemic has not only affected Sony, but it has also affected everyone. Including all of Xbox and Sony’s customers.
In the current climate, the three top competitors in the gaming market are Sony, Xbox, and Nintendo. Compared to Nintendo and Sony’s latest consoles, the PS5 and the Nintendo Switch OLED, the Xbox Series S is currently wearing the crown for the cheapest gaming system on the market. That is a very advantageous position to be in.
The Xbox Series X|S already provides some of the most advanced specs out of all the gaming consoles. So the fact that the Xbox Series S is also the cheapest makes purchasing one seem very appealing.
Trying to decide if you should buy the Xbox Series S or Xbox Series X is the most difficult decision any Xbox gamer will have to make. But it is hard to argue with the Xbox Series S’s price point.
Companies Don’t Make Money on the Consoles Themselves
Most companies run at a loss when manufacturing and selling these beastly gaming consoles. That cost is then made up later on through game sales.
By increasing the price of the Xbox Series X|S, Microsoft would more than likely make a minuscule percentage of that back as profit. They are far better off working on improving Xbox Game Pass and creating console-exclusive titles for customers to purchase.
But don’t panic! That doesn’t mean that Microsoft will make their games more expensive to compensate for inflation and economic difficulties. Microsoft hasn’t increased the price of their games to $70 yet, and there is no indication that there are any plans to do so.
Microsoft Gets a Leg Over the Competition by Not Joining the Price Hike
The console war is a battle that will most likely rage on forever. But by refusing to increase the price of the Xbox Series S|X and its games, Microsoft may find itself in the top spot.
Xbox fans can rest assured that the price of their beloved console and games will remain as stable as always. And thankfully, that crown that the Xbox is wearing as the cheapest next-gen console doesn’t look like it’s going anywhere soon.
Reference: https://www.makeuseof.com/why-microsoft-shouldnt-follow-ps5-price-hike/
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