Sony made headlines with its $399 disc-less PlayStation 5 (PS5), grabbing a lower entry point to the comparable 4K Xbox Series X. Microsoft also a $299 disc-less option in the form of the HD-oriented Xbox Series S. Both the Xbox Series X and Xbox Series S preorders are slated to go live next week, alongside the PS5 preorders. We're almost in the full swing of the next-gen console war.
Despite Sony undercutting the Xbox Series X with its digital edition, a quick glance at the small print reveals some interesting caveats. Not only will PS5 controllers (opens in new tab) be getting a price hike to coincide with the fact PS4 controllers aren't compatible with the PS5, but Sony is dropping a price hike on its games, jumping from $60 to $70 in the U.S., and often even more in Europe, the UK, and other markets.
Publishers are also following suit, with various next-gen games from third-party developers hitting $70 as well. One outlier, at least right now, is Microsoft, which has thus far stuck to the $60 standard price we've seen for years.
Should Microsoft follow the rest of the industry with a price hike on its games, or are there other options for Xbox?
Potential cons of sticking to $60
If Microsoft sticks to the $60 price point for games while the industry at large moves on to $70, the obvious downside is less cash to reinvest in the business.
With Xbox Game Pass forming the basis of Microsoft's next-gen offering, investing in studios and content is more important than ever. If the wider industry is moving to a model of $70 per game and Microsoft isn't, it is potentially leaving money on the table while other publishers cash in.
Naturally, Sony, Microsoft, and other platform holders take a cut of games sold through their platforms. There are screenshots floating around of PS5 games being more expensive than the equivalent Xbox Series X game, although when doing my own searches, I found that the major third-party multiplatform games like Assassin's Creed Valhalla and Cyberpunk 2077 seem to be the same price across the board.
That indicates to me that this increase is specifically for games Sony is publishing, such as Demon's Souls, which is $70 (opens in new tab). Typically platform holders don't set the price of third-party games, and there's no indication that Sony has increased its cut of its collaborator's revenues. This has more to do with subsidizing the hardware, which Sony and Microsoft both are most likely selling at a loss. Microsoft can eat those costs more easily than Sony can, but at least in theory, wouldn't a $70 Halo Infinite give Xbox more resources to reinvest in 343i, and increase the cadence of fresh content?
Potential pros of sticking to $60
If Microsoft sticks to the $60 price for games, it becomes a point of differentiation that could be attractive to consumers, especially in territories where the price hike is deeper, like the EU. The fact Microsoft is also publishing its games on Steam and the Microsoft Store for PC creates a deeper price disparity. Historically, PC games have been cheaper than their console counterparts. With console games costing even more in the new generation, that price disparity would get even deeper.
Even though the PS5 Digital Edition is, on paper, cheaper than the Xbox Series X, the fact you can't use your old PS4 controllers and need to buy Sony's games at $70 a pop — a major selling point of PlayStation in general — the actual real-world overall cost is potentially higher for some than simply buying an Xbox Series X with Xbox Game Pass.
Microsoft could market a suite of benefits that prove Xbox is a lower overall cost than PlayStation 5 for next-gen, particularly when you factor in Xbox All Access, which lets you pick up an Xbox console and Xbox Game Pass on a two-year monthly payment contract. Either way, any price hike just increases the value proposition of Xbox Game Pass, which lets Microsoft continue to push that growing segment of its gaming business.
What do you think?
Obviously, as consumers, we all want the cheapest games possible, but if you were in Microsoft's shoes, what do you think would be the best course of action? Miss out on additional cash flow, which could finance further investments in content and studios? Or keep things as they are, and use it as a point of differentiation? Are there any other pros and cons worth exploring?
Xbox Series X/S
Jez Corden is a Senior Editor for Windows Central, focusing primarily on all things Xbox and gaming. Jez is known for breaking exclusive news and analysis as relates to the Microsoft ecosystem while being powered by caffeine. Follow on Twitter @JezCorden and listen to his Xbox Two podcast, all about, you guessed it, Xbox!
I don't think that there is a good side to 70$ games, these publishers are always bragging about record sales and profits, so the 60$ was never an issue. This will start with the bigger games and sports games and then everyone will follow. I give it a year until everyone follows.
I wouldn't mind it if we weren't going to then get hit with paid expansions to finish the story and microtransactions and all of the post-purchase monetization we're fed these days. Like, $70 for a Demon's Souls title that is a single-player campaign and nothing else, I can see the reason for it. $70 for Halo Infinite to prod me to buy cosmetics for the next 5 years? $70 for Forza to try to charge $1-2 per-car in DLC packs? Not as keen on that. I'd pay $70 for a game built to sell me the game once and never ask for payment again, like a new Hellblade. I don't, however, want to see Sony try to sell me MLB The Show for $70 and then ask for a billion dollars in digital trading cards.
This is why GamePass type subscriptions are inevitably the future of gaming. There will of course always be the option of the one-off purchase (particularly for single player, complete story type games). But for the multiplayer (CoD, Halo, Gears etc.) type games with very long shelf lives, we cannot reasonably expect the devs to keep adding/updating fresh content like new maps for 'free'.
The only sustainable way is a subscription type service, where the steady income stream is spread across the development effort. It's already happened with most enterprise software (Office, Adobe etc.).
Barrier to entry is in a sense $0 since you are already subscribed anyways. In that way, the cost of development is actually spread across all the subscribers, such that it does not overburden any single subscriber. In a weird way, it's just like paying tax lol! Not cheap, but the collaborative contribution of millions of individuals works wonders that the separate individual could never ever achieve alone.
Do a rough calculation. Let's say Xbox can increase GP ultimate subs to 20 million, paying $180 per year. That is a steady revenue of $3.6 billion from GamePass ALONE. I'm pretty sure this can offset a huge chunk of whatever deals and development it may cost. Now, increase the subs to 40 million, and we have $7.2 billion from GamePass alone. That is some serious funding for games and 3rd party deals.
It is why they are going all in on GamePass. It is a gold mine if successful.
Apple recently introduced Apple One subscription service. Everyone wants a piece of the action now lol!.
It's the most likely solution, Sony is probably working on their version of GamePass right now.
Trillion dollar company and Xbox has full support from Satya.. They will be alright even if they don't follow Sony in the price hikes.
It won't matter because there'll still be the microtransactions, season passes, promotional tie-ins, etc even with a $10 price jump.
Have you played a lot of PS4 exclusives.
I don't think most of the games are the typical MS-like service.
If Sony offered a Playstation Gamepass it wouldn't be an issue. The problem I see is the cheaper PS5 DE is going to lock all PS gamers into £70 games. If you could sign up to a £10.99 subscription and play them all day 1 then there would be 0 issue.
That would be bad for them. It would kill any reason to purchase their single player only exclusives. They have little replay value. People would just play the game complete it and done. No reason to buy the game or come back to it.
Digital titles should stick to $60 or less, disc versions should be $80 to discourage plastic use, compensate for resale, and help cover the cost of recycling disc's and packaging at the end of their lives as well as offsetting the carbon footprint of physical distribution.
Or maybe, disc versions should be $60 and digital versions should be $40 using that same concept. I think that's how it should have been for years.
So you really believe games should be $40 in today's money when they were $50 in 2000's money? You ever heard of inflation? I remember SNES games being 50-60 dollars in the store, and that was a long time ago. It is understandable the cost of games going up, what everyone should have an issue with is the lack of finished content or microtransaction nickel and diming that these companies do.
I've replied to that many times. Not only should it not be 70 bucks but it should be cheaper and MUCH cheaper if they'll have free2play economics.
The markets are a lot different now then what it was 10 years back never mind 30 years back. There was a video talking about that and showing that major publishers makes a lot less games than 10 years back but makes a more money (even considering inflation). And while I understand that Sony are usually not adding microtransactions and other bs in their games but these games help them sell millions of consoles, services and indirectly other games...
@Avatar of Apathy - Your second paragraph is exactly why I made my comment. When they can start putting out games that are actually finished and don't nickel and dime me, I will be willing to pay more for them. Just about every game these days is released in an unfinished state and it is completely unacceptable. Why is everyone in the world in such a damn hurry? Time is one thing that we have an infinite amount of.
Honestly until a few days ago didn't realise that games have been priced at $59.99 for years. I live in the UK
ps2 and original Xbox games were priced at £19.99-£29.99
ps3 and Xbox 360 games were priced at £29.99-£49.99
ps4 and Xbox One games were priced at £49.99-£54.99 (at launch) then since 2014/2015 they cost £54.99-£59.99 So from a UK standpoint, it seems to go up by £10 every gen so not a big deal over here. If games are priced at £59.99- £69.99 ($77.47 - $90.39)
I think the GamePass model is inevitably the future of gaming.
The amount of published games has reached critical mass necessary for this. It happened to traditional software (Office 365, Adobe suite, nearly all CAD/Scientific tools I know), Music (Spotify etc.), Movies (Netflix etc.), now Games are ready. It is really the only sustainable model because the one-hit make-or-break model for Games is just too high risk. People celebrate the major hit titles but forget the thousands that fall by the wayside. Most gamers have only so much $60 to spend per game.
I'd rather drop $180 a year and spread my entertainment across a good variety, than drop that on 3 games for the entire year (and limit my meager resources to only a few successful publishers/developers). Of course there's always the option of buying to own, but that happens at my pace, at a price point I can accept, I'm in no particular hurry. I actually hardly buy any game full price :-(
I am willing to bet Sony introduces their version of 'GamePass' in about 2 years. It's inevitable, the present model just can't be sustained because the cost of producing games has become prohibitive. A steady stream of subscription based revenue is a more stable, realistic alternative.
charging more for games doesn't solve the problem. game publishers are reaping huge profits but it's not going down to all their programmers. trickle down doesn't work. the rich always promise that if they get more money, they give you more money. we know how that works out. if you're a gamer that loves to play games, buying $70 titles doesn't work. that's why Xbox Game Pass is amazing. hundreds of games to play for a small fee. sure, I don't get to own but there's not much purpose to owning games anymore.
Raising the price up is not the only way of increasing profit. Expanding the markets and different ways to buy games like game pass are the better options. In 2000 the price of the games was the same but everyone was using disks and shared them with friends. Now everyone is buying digital copies which have penetration in a lot more markets and cannot be shared and the people are playing games on subscription that they would not have bought if they must pay the full price. So this is the better way of making more money for the developers but not moving prices up for the consumer.
What's really worrying is Take Two have increased their prices for next Gen. There is 0 reason why Take Two should increase their price. It's simply because shareholders demand more return each year. https://www.trustedreviews.com/news/gta-5-now-profitable-entertainment-p...
Microsoft couldn't give a toss about games being $60 or $70 because they want everyone on Game Pass anyway. Other Publishers will price things the same on both systems, if they go up to $70 on PS5 you can be sure they will be $70 on Xbox.
I forgot to add, people that complain about the price of things is hilarious, if you don't want to pay x price, then don't. No one is forcing you to buy anything. The fact of the matter is everything else goes up in value, so obviously games are going to change pricing as well. Hell people are still gobbling up mobile phones and computers even though they increase in price on a yearly basis, so what's an extra 410?
Suppose (in Europe) you are buying three 1st party AAA + three 3rd party AAA per year and playing online. In 2 years PS5 will cost you: 480 for 1st party + 420 for 3rd party + 500 for console + 120 for PS Plus = 1420/1520 in 2 years. Only with PS Now you can play old games without spending huge amount of money - even here you are limited to specific titles. So overall 1540/1640 for no new games. And 9% difference between two SKUs - what is the point? With Xbox and same setup in 2 years Xbox will cost you: ALL 1st party games, Xbox Live Gold in Game Pass Ultimate for 312 + 420 for 3rd party + 500 for console = 1050/1250. Logical 20% difference between SKUs. So PS5 is 30% more expensive! Has 20% smaller SSSSDEEEEE, which will not be utilized for probably 1 year except, what, in 1 title for kids? I guess kids do not care about SSD speeds. So raising the prices for the games is not good.
While industry likes to talk about more expensive production, their audience is now twice as bigger compared to the beginning of the generation. Their monetization practices are awful, innovations are gone and the quality of released games is far, far from perfect. And I understand that this is for future games. Not the games that were already released. If they would raise it 1 dlr more and they have loyal user base, they would get 120mln, right? It is enough to release AAA+ game. They talk about additional 1.2bln for each good new game. For EACH!
In my opinion, Sony has real financial difficulties and try to compensate them form PlayStation. These money will not be used to create new games. It is not good.
I never bought a game at $60 so far. $70 will happen even less likely.
One thing to consider: early in a console generation most of the game earnings come from the previous generation's installed base. Based on that, Microsoft's position makes more sense: stay at $60 so the old installed base doesn't pay for features they don't get and they can't do what Sony is doing with Spiderman charging more to next gen players early adopters don't pay extra for the same game, added features or not. I expect MS will go to $70 sometime in 2021 or whenever they start releasing Series X|S exclusives but considering the difference will be at most $10 times 6-7 million and more likely half or even a third of that, tbe good will and added buzz is worth more than any publicity they could buy with the extra money. The thing to remember is MS doesn't need the extra money.
Maybe the third party studios do, maybe they don't.
But Sony is taking an $80 hit on the "please don't buy me edition" so they definitely need every last penny they can squeeze out of the faithful. MS just invested $7.5B on a long term deal; a hundred million or two is of less concern.
And, let's not forget: MS is *not* playing the old-fashioned game royalty business. With $15 a month from 15M subscribers they can afford to stay at $60 on their own games to make more profits in the long term.
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