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Xbox boss says current-gen console prices ‘won’t come down’ like they used to

Micorosft’s head of gaming has said the price of current-gen consoles won’t come down over time in the same way as during past generations.

While previously it could be relatively cheap to buy console hardware at later stages of its lifespan because reduced manufacturing costs might be passed on to consumers, Xbox boss Phil Spencer told Eurogamer that’s no longer the case.

“The prices aren’t coming down,” he said. “We see it now, and that’s why we did Xbox Series S. I know there’s a bunch of questions like, ‘what is it doing?’ We wanted to make sure we had a sub-$300 console because we want to grow, and we think an entry level price point for many new families or players coming into the market is going to be important.”

Spencer added: “For us, thinking about where our hardware is going and reaching more customers, price point is important. But you’re not going to be able to start with a console that’s $500 thinking it’s gonna get to 200 bucks. That won’t happen. 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 anymore as a hardware maker because nobody’s making that kind of RAM or other components.

“It’s not the way it used to be where you could take a spec and then ride it out over 10 years and ride the price points down. It’s why you see console pricing relatively flat.”

In fact, the price of current-gen consoles has increased since they launched in November 2020. Sony raised PS5 prices by up to 12.5% in numerous countries last August, blaming “high global inflation rates, as well as adverse currency trends”.

Microsoft followed suit a year later, raising Xbox Series X prices this month in most countries to be in line with those of PS5. It said the adjustments were made “to reflect the competitive conditions in each market”.

Over the last two months, however, Sony has introduced temporary PS5 price cuts, fuelling speculation it’s attempting to clear stock ahead of unconfirmed plans to launch a new PS5 model with a detachable disc drive.

In legal documents published in July, Microsoft said it expects Sony to launch a PS5 Slim console this year.

The new PS5 model will cost the same as the existing PS5 Digital Edition console, which is $100 less than the standard PS5, it suggested. The Xbox maker also said it believes Sony is preparing to launch a separate PS5 Pro console.

In June, Spencer said a potential mid-cycle upgrade for Xbox Series X wasn’t a priority for Microsoft, and he reiterated this in interviews this week.

“As soon as you start doing mid-gen refreshes, you’ve got a bunch of issues in front of developers, on what platform they target,” he told Eurogamer.

Spencer added: “If we get into a console world where, every two years, we now have three or four closed ecosystems that are upgrading their hardware every two years, I’m gonna wonder – how is that helping creators or players? To me it feels like we are creating a ton of complexity for creators and players in something that used to be very simple. And maybe there’s another model for us.”

He also told IGN that he believes “we’re kind of at the end of the beginning” of the current console cycle. “So I think we need to let devs settle on this hardware and get the most out of it.

“But in terms of increased frame rate and increased resolution, I just look at what goes on on PC with high-end GPUs and high-end CPU, and it’s not always just about pixel count or frame resolution. I think there’s lighting techniques. There’s a bunch of things that go into what makes a game look and feel great. And we have a ton of headroom as an industry there.”