Microsoft's Xbox boss says jacking up video game prices can end up being 'manipulative'

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Microsoft's Xbox boss says jacking up video game prices can end up being 'manipulative'
Phil Spencer, head of Microsoft's Xbox Division, shared his thoughts on raising the price of its games from $60 to $70. Kevork Djansezian/Getty Images
  • Microsoft's Xbox boss says making its games more expensive can end up being "manipulative."
  • CEO Phil Spencer told Game File that Xbox hasn't done enough to court new customers.
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Xbox games may be more expensive now, but Microsoft's gaming CEO realizes that there's a limit to how much gamers will take.

Last year, Xbox jacked up the price of its video games from $60 — once the standard in the gaming market — to $70 each.

"We've raised the price of games," Phil Spencer, the CEO of Microsoft Gaming, told Game File, a newsletter focused on the business of gaming.

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"We went through COVID. We found ways of getting more money per player," he continued. "I think at some point you reach a peak on that, and, frankly, it can go to some places that are manipulative that I'm not a big fan of."

Spencer also said Xbox and other hardware developers aren't bringing in enough new customers.

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"I don't think we're doing a good enough job finding new players," Spencer said. "Let's pick consoles as a good example: We found 200 million global households that will play console games. And that number really hasn't changed in the last five, six years."

The solution: search for new customers by making Xbox's games more accessible, the CEO said.

Xbox has taken steps toward that goal by making its titles available on phones, smart TVs, and tablets without the need for a console. Microsoft has also released new, cheaper consoles like the $300 Series S.

Spencer, reached through Microsoft Gaming, didn't immediately respond to Business Insider's request for comment.

Back in December 2022, Microsoft told The Verge that it would be raising prices to reflect "the content, scale, and technical complexity of these titles."

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But one analyst said gaming advancements don't explain the full price hike.

"[It's] not only just due to complexity but increased salaries for programmers and creatives in general, as tech companies and Hollywood and video game companies are fighting for a lot of the same talent," Neil Macker, a former analyst at Morningstar, told Marketplace last year.

Xbox has now joined the ranks of Nintendo, Sony, Ubisoft, and Take-Two in raising the price of games to $70 from the decades-long industry standard.

Already, some customers aren't happy.

"Skull and Bones," an action-adventure game for the PlayStation 5 and Xbox consoles, got some flack for charging $70 for its highly anticipated game. Ubisoft, the company behind the pirate video game, defended the price because it was a "quadruple-A" game.

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Traditionally, big studio games are labeled "AAA" to signal their high budgets.

While gaming companies are charging more, they're also cutting costs. Last month, Microsoft announced it would cut 1,900 workers across its gaming subsidiaries like Xbox, Activision Blizzard, and ZeniMax to help create a "sustainable cost structure," according to an internal memo obtained by The Verge.

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