Microsoft Gaming CEO Phil Spencer has backed the company’s decision to Xbox price hike in Brazil, claiming that it was necessary to uphold business in the region.
In an interview with the Brazilian media outlet FlowGames, Phil Spencer discloses that the company “forcefully” retained its pricing of Xbox products for three consistent years, resulting in minimized profits, which hurt the business in terms of being “sustainable”. For those unaware, Microsoft has recently implemented a whopping 35% price hike in Brazil for the Xbox Series S from R$2649 to R$3599. This is somehow higher than Sony’s PlayStation 5, unlike in most countries, making it an unappealing offering.
Phil said that regional markets can’t be directly compared, mainly because they are very different regarding government policies, consumer base, and market competitiveness.
Upon being questioned further, the Microsoft Gaming CEO exclaimed that the increase in Xbox Series X|S pricing didn’t have a huge impact on the company’s profit margins and it is probably “the smallest margin in the world”. However, Microsoft’s primary aim with Brazilian markets is to be future-proof and in a position that actually prioritizes longevity over financial gains, said the executive.
And even with the price we have now, after the increase, this is, for us, in terms of what we can see from the sales of the Series S [in Brazil], probably the smallest margin in the world of what we get, from the revenue that we managed to get. For me, the most important thing is that pricing occurs in a way that makes us viable here in the long term. I need to make sure that my commitment to the consumers here is to run a good business.
Asking how big of an impact the price increase will have on Brazilian consumers, Phil Spencer showed sympathy, claiming that he feels “respect for them”. However, yet again, he reiterated that Microsoft values its position in the Brazilian industry, and in order to stay competitive, a price increment was inevitable.
While we aren’t sure whether the price hike in Brazil means that we might see a similar move being made in other markets, we hope not since it always turns out to be disappointing for the average consumer. Although the comments made by Microsoft’s CEO are reassuring, a huge price hike on Xbox’s entry-level product is indeed a questionable business move. The Xbox Series S was meant to be accessible; having it priced higher than a PlayStation 5 largely defeats its purpose.
News Source: FlowGames
