Ex-Blizzard president criticizes Xbox price hikes, says Microsoft is passing costs to consumers

Former Blizzard president Mike Ybarra speaks out on Microsoft's recent price hike, suggesting it's essentially a cash grab that passes the costs down to consumers.

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No one's happy about raising console prices, especially Microsoft. Despite popular belief, the company does still want to grow its console presence--it's just not happening, and some of that can be attributed to the confusing 'This is an Xbox' marketing campaigns. Global economic volatility has forced everyone to raise prices, and Microsoft isn't immune: They announced the second Xbox console price hike of 2025, exposing a sticker-shock $800 price tag for the 2TB Galaxy Black Xbox Series X.

The move was incredibly unpopular, and some stores, like the world's third-largest retailer Costco, are removing Xbox products from their online and in-store inventory. It feels like bad news for Xbox, at least the traditional Xbox console environment, and everyone's taking notice--even former executives that worked closely with Microsoft's gaming brand.

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Mike Ybarra, who used to lead Blizzard and had been a former Xbox executive years ago, has weighed in on the Xbox console pricing situation. Ybarra says it's just a profit issue...which is interesting, because no current Xbox consoles are sold at a profit--nor have they ever been.

In fact, Microsoft has indicated that it sells Xbox Series consoles at a substantial loss.

"Console price increases are not tariff issues, they are profit issues. And the reason why profits are not where they should be is a far, far deeper issue vs. the tariff excuse," Ybarra said on Twitter.

"...tariffs went up once, so that does justify the single price increase. An excuse to continue raising prices, with no new increase in tariffs, is simply a different problem and they are going to make consumers continue to pay for those problems."

It's undoubtedly true that companies are raising prices in order to pass the tariff costs down to consumers, however it's not so straightforward with Microsoft, especially given their loss-leading console hardware. In a bit of irony, a way that Microsoft could stem the losses from these unprofitable and slow-growing pieces of hardware is to...produce less of them. This might be happening.

Ybarra's words ring more true for companies like Sony and Nintendo, who both sell their respective PS5 and Nintendo Switch/Switch 2 video game systems at a profit. Price hikes on these systems could be seen as a way of improving margins.