Microsoft Will Raise Xbox Console, Game Prices To Break Deflationary Spiral

Microsoft is raising prices on its Xbox consoles, games, and accessories, marking a potential turning point after decades of deflation in the gaming industry—even as development costs have continued to rise. The move underscores mounting pressure on developers and publishers to restore margins, while new optimism for the industry builds ahead of this fall’s release of the guaranteed mega-hit Grand Theft Auto 6.

The technology news website Engadget reports that Xbox consoles and games will see price hikes this year. This means Xbox Series S will start at $380, up from the previous price of $300. The Series X console will be priced at $550, a $100 increase.

For Xbox video games, the average price for AAA-rated games is expected to rise to $80.

Here are more details about the price increases:

Microsoft is dramatically increasing the price of the Xbox Series X and Series S, as well as new games and accessories. As of today, the Series S will start at $380, up from $300, while the Series X will begin at $550, a $100 increase from its previous price. As for the 1TB Series S, it now costs $430, up from $350. Meanwhile, if you want the Series X with disc drive, it will now set you back $600. Lastly, the 2TB Galaxy Black Special Edition now costs an eye-watering $730.

Additionally, Microsoft says beginning this holiday season „some” new first-party games will release at $80. At the same time, the company is increasing the price of nearly all of its first-party and peripherals. Most notably, a core controller will now set you back $65.

In an emailed response, Microsoft told Engadget about the challenges in the video game space and new pricing was made after „careful consideration given market conditions and the rising cost of development,” adding, „Looking ahead, we continue to focus on offering more ways to play more games across any screen and ensuring value for Xbox players.”

Let’s revisit our earlier note titled „Grand Theft Auto VI Priced at $100?” This Gaming Analyst Believes So.”

We cited Epyllion CEO Matthew Ball, who said Rockstar Games’ guaranteed mega-hit Grand Theft Auto 6 release this fall „could re-establish packed video game prices after decades of deflation despite rampant cost growth.”

Epyllion’s Ball predicted that GTA 6 could help reverse the deflationary downturn in the video game industry, stating: „Some game makers hope GTA 6 will be priced at $80-100, breaking the $70 barrier and helping $50 titles move up to $60, $60 to $70, $70 to $80.”

In the early 2000s, video games were priced around $50. By the mid-2000s, the price had increased to $60, and in 2020, the industry raised the price of AAA-rated games to $70.

„Packaged game prices have never been lower in real terms than they are today — even though budgets are at all-time highs and player growth is stalled,” Ball continued, adding, „GTA 6 could re-establish packed video game prices after decades of deflation despite rampant cost growth.”

Since GTA 5 was released in 2013, gamers have been waiting over a decade for the next installment—and it’s safe to assume that, after such a long wait, many will be more than willing to pay $70 to $100 for GTA 6 (after all, consumers can use BNPL apps for payment).

More tailwinds for the gaming industry materialized last week when the Nintendo Switch 2 pre-order frenzy swept across the world.

Whether GTA 6 can single-handedly save the video game industry from a deflationary death spiral remains a big question. We’ll find out in the second half.