Microsoft’s Head of Gaming, Phil Spencer, recently revealed to Eurogamer that the pricing of current-gen consoles won’t follow the downward trend observed in previous generations. This significant shift in the market has repercussions for both manufacturers and consumers.
While consoles have traditionally become more affordable as their life cycle progresses, thanks to reduced manufacturing costs, Spencer made it clear that the trend has ended.
“The prices aren’t coming down,” he stated, emphasizing that this reality motivated the creation of the Xbox Series S as a sub-$300 option for entry-level gamers.
The current state of hardware manufacturing doesn’t allow for the price reduction seen in the past. Spencer explained, “Because the core components that you use – you’re used to Moore’s Law shooting up and to the right – but your components… you can’t buy them as a hardware maker anymore because nobody’s making that kind of RAM or other components.”
This pricing stability is also seen in the competition between Microsoft and Sony. Last year, Sony raised PS5 prices by up to 12.5%, with Microsoft following suit, aligning Xbox Series X prices with those of PS5.
Further speculation has arisen regarding Sony’s plans to introduce a new PS5 model with a detachable disc drive and a potential PS5 Slim console, both potentially impacting market dynamics.
Spencer also dismissed the idea of a mid-cycle upgrade for the Xbox Series X, considering it a non-priority. He noted that such a move would create “a ton of complexity” for developers and players, starkly contrasting to the simplicity that defined previous console generations.
With these insights, it’s evident that the gaming industry is entering a new phase where price points may remain relatively stable, reflecting a change in market strategies and manufacturing realities.
The full interview with Phil Spencer is available on Eurogamer.