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Amidst a global memory shortage and rising development costs, Microsoft faces a delicate balancing act: how to keep gaming accessible while maintaining profitability across its console, subscription, and game portfolio.
In a surprising reversal earlier this year, Microsoft quietly abandoned its plan to sell upcoming major Xbox titles like The Outer Worlds 2 for $80, opting instead to stick with the current $70 standard. This decision, revealed in a recent Variety interview with Xbox Game Studios head Matt Booty, comes at a time when almost every other aspect of gaming is becoming more expensive—from console hardware to subscription services.
Booty acknowledged that while the company must "balance that with needing to run a healthy business," their focus shifted to "delivering player satisfaction and delivering player value" after listening to fan feedback. This philosophy of "meeting people where they are" has temporarily spared gamers from paying an extra $10 for first-party titles, even as Microsoft raises prices elsewhere.
The Strategy Behind the Decision
During his interview with Variety, Booty explained Microsoft's nuanced approach to game pricing in an era where "monetization happens in so many different ways". The decision to walk back the $80 price point wasn't just about goodwill—it reflected a strategic calculation about where value is perceived in today's gaming ecosystem.
According to Booty, Microsoft plans to place "less of a focus on what's that top line price of a game" in favor of delivering value through alternative monetization methods like downloadable content, expansions, and in-game purchases. This allows the company to cater to different player budgets while maintaining revenue streams from those willing to spend more on their gaming experience.
Booty emphasized in the interview: "We're going to continue to listen to the feedback from fans... But right now, on the content side, we don't have any pricing updates".
The full interview with Matt Booty provides deeper insights into Microsoft's approach. You can read it here: Xbox Game Studios head Matt Booty discusses Call of Duty movie, Dev Direct plans.
Where Prices Are Still Rising
While first-party games have avoided a price hike—for now—Xbox players are facing increased costs in almost every other area:
Console Price Increases
In 2025 alone, Microsoft implemented its second round of console price increases:
- Xbox Series S 512GB: Increased from $379.99 to $399.99
- Xbox Series X Digital: Increased from $549.99 to $599.99
- Xbox Series X: Increased from $599.99 to $649.99
- Xbox Series X 2TB Galaxy Special Edition: Increased from $729.99 to $799.99
These hikes mean that the Xbox Series X now costs $150 more than its original launch price five years ago.
Game Pass Restructuring
October 2025 brought significant changes to Xbox Game Pass, including a 50% price increase for the Ultimate tier from $19.99 to $29.99 per month. The restructured plans now include:
- Essential ($9.99/month): 50+ games, online multiplayer, cloud gaming
- Premium ($14.99/month): 200+ games, new Xbox-published titles within a year of launch
- Ultimate ($29.99/month): 400+ games, day-one releases, Ubisoft+ Classics, EA Play, Fortnite Crew
The Ultimate plan's annual cost of $360 now exceeds the price of an Xbox Series S console, raising questions about value perception among subscribers.
PS5 Absolutely Dominated Black Friday Week In The US, Taking Nearly 50% Of All Console Sales:
— @Zuby_Tech (@Zuby_Tech) December 6, 2025
1. PS5: 47%
2. Nintendo Switch 2: 24%
3. NEX Playground: 14%
Xbox wasn’t even mentioned. pic.twitter.com/K9EZSUZWdw
The Industry-Wide Pressure: Memory Shortages and AI Demand
Microsoft's pricing challenges are occurring against a backdrop of global memory shortages that threaten to make all gaming hardware more expensive. According to industry analysts, a perfect storm of factors is driving up costs:
- AI industry dominance: Memory suppliers like Samsung, SK Hynix, and Micron (who control 93% of the global DRAM market) are prioritizing AI data centers over consumer products.
- Production shifts: Micron is winding down its consumer-facing Crucial brand to focus on AI memory, while Samsung and SK Hynix have reportedly committed 40% of their memory output to a single AI project.
- Ripple effects: The shortage impacts everything from smartphones and laptops to gaming consoles, with experts predicting price increases across consumer electronics throughout 2026.
This memory crisis has already affected Microsoft's competitors, with leakers suggesting further Xbox Series X price hikes may be inevitable. The situation echoes the broader trend of companies like Lenovo stockpiling memory to prepare for future shortages.
Looking Ahead: An Uncertain Future for Game Pricing
While Booty assured that Microsoft currently has "no pricing updates" for first-party games, he notably didn't rule out future increases. The temporary reprieve on $80 games may represent a strategic pause rather than a permanent policy, especially as development costs continue to rise.
Other industry players are testing higher price points—Nintendo charges $80 for Mario Kart World, and discussions continue about what Rockstar might charge for Grand Theft Auto VI when it releases in 2026. Microsoft's decision to hold at $70 for now may give them a competitive edge in attracting budget-conscious gamers, especially when contrasted with their subscription and hardware price hikes.
This strategic balancing act reflects a broader industry challenge: how to maintain profitability amid rising costs without alienating an increasingly price-sensitive player base. As memory shortages continue to pressure hardware margins, and subscription services face value perception challenges, Microsoft's mixed approach—holding the line on game prices while increasing costs elsewhere—may become a template for the industry's navigation of these turbulent economic waters.
For ongoing discussion about gaming industry pricing trends and their impact on players, follow gaming analysts on social media platforms, including conversations like this one on X.