Xbox explains why it's okay with keeping games at $70

Microsoft wants Xbox to make more profit, and the Xbox games division is pulling out all the stops to make that happen. But there's one thing they may not do for a while: raise game prices to $80.

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In June, Microsoft made one of the most unpopular announcements in recent memory: new first-party Xbox games would now cost $80, starting first with Obsidian's The Outer Worlds 2. The decision was lambasted and Microsoft changed its mind, dropping The Outer Worlds 2 back to $70 and implying that all future first-party games would retain this price. It's interesting to note that Nintendo actually was the first to charge the $80 baseline for new AAA games with Mario Kart World's launch on the Switch 2.

In a recent interview with Variety, Xbox Game Studios head Matt Booty was asked directly about $80 games, and while he responded that Xbox "does not have any pricing updates," he did seem to indicate that it might be a while before Microsoft tries to raise baseline software prices again.

• Read more: Evidence of third Xbox Game Pass price hike found as Microsoft charges $80 for new games
• Read more: Gamers slam $80 price for Outer Worlds 2, developer shifts blame to Xbox
• Read more: Game Pass cloud streaming usage up significantly during holidays, Xbox CEO Phil Spencer says

The Xbox exec rightly points out that there are many different opportunities and avenues to make money in the interactive entertainment space--selling software, leasing it with subscriptions, and then there's the wealth of microtransactions and in-game content that's up for sale, ranging from consumables and existing content to far-off experiences that have yet to be released.

Xbox, in particular, has fragmented its business to meet all of these touchpoints.

Here's what Xbox Game Studios head Matt Booty said on the topic of pricing:

"Our whole focus is on delivering player satisfaction and delivering player value. And we're always going to be listening to what people want there.

"We've reacted in the last year and I think for us, the real focus is going to be - I'll come back to the phrase meeting people where they are.

"I think there's going to be less of a focus on what's that top line price of a game, as people start to engage in different ways with games. From our point of view, monetization just happens in so many different ways right now.

"So we're going to continue to listen to the feedback from fans. We're going to continue, to balance that with needing to run the healthy business. But right now, on the content side, we don't have any pricing updates."

Reports indicate that Microsoft's games division is set to open up a brand new monetization point with its cloud game streaming service.

Xbox is expected to offer a free version of Xbox Cloud Gaming that is powered by advertising, where gamers can stream select titles for free in set slices of time in exchange for watching ads.

Microsoft has yet to announce the ad-supported Xbox Cloud Gaming tier, but reports say that the feature is currently in closed internal testing.

The ad-supported tier would be the latest move in Xbox's quest to meet high profit targets set by Microsoft following the Activision acquisition. Bloomberg reports that Xbox is to deliver a 30% profit margin, which is steep considering the division's hardware base is sold at a loss.

Xbox has since raised the price of other products (see below), with two console hardware price hikes in 2025 alone, as well as a single Xbox Game Pass price hike.

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