Microsoft and Sony Hiking Prices Already Should Be a BIG Warning Sign

The new consoles are out and people have begun weighing in on every possible side of every possible argument about them.  Some are concerned with how many games they have, some are concerned with the potential privacy violation, some are worried about the viability of a console industry at all anymore.  I, however, am concerned with the mindset of modern gaming companies that are already hiking prices for no real stated reason within a month of releasing their new consoles.

Business is Business

First of all, this is not a rant about how companies should not want to make money.  I appreciate that gaming companies need to hit their bottom line.  Everyone needs to make a living and making one by creating and making available a service people use for leisure (one which harms no one) is one of the easiest to agree with from a moral standpoint.

There is a fine line between being profit-driven and blind greed.

The source article outlines where several prices on Microsoft’s Xbox One UK digital store have increased since the console’s release.  Sony has also been questioned regarding some suspiciously high prices on their digital store for their new console.  Neither company gave truly satisfactory answers, wash with corporate double-talk and basic free-market talking points.

To their credit, the argument that these digital stores cannot undercut physical retailers has significant merit for console games.  For a point of comparison, look at how few computer games you can find on a physical store shelf as opposed to how many you would find there ten years ago.  Computers progressed into an entirely digital medium smoothly, with more money for everyone.  The gamers pay less for the same thing, while the developers don’t have to pay nearly as much creating physical copies for the games.

Console gaming cannot follow the same logic.  Consoles by their very nature are hardware-based.  They require a physical presence in many ways for the consoles themselves as well as controllers and peripherals.  Even more than the raw requirement is the expectation.  After decades of consoles, people expect to be able to do things like carry their new console game to a friend’s house.  The backlash against Microsoft for originally planning to do away with that practice is telling.

Business is Obvious

Having established that gaming companies have a right to earn a profit, and some complications do make pricing of digital goods a bit more complicated than first glance, why are they sticking to the same tired talking points?

Telling us pricing is complicated by region would only work if there were not already set and known prices from region to region.  If your pricing is to keep even with physical merchandise then we should logically be able to expect the same prices in a given digital region as we would in the retail stores of that region.

Even given different pricing issues, why would one of these major companies need to change their prices so soon after the consoles went live?  If there is a real complication only brought up by the actual sales numbers, why are they not telling us?  Why use the same tired corporatized excuses we have heard in every other business?

Given the modern economy it is difficult to imagine pricing is not exhaustively researched before a major release, and an entire console definitely counts as a major release.  This leaves us with two possibilities for why these companies are raising prices.

First, they are incompetent.  With the full power of Microsoft behind it, they were simply wrong in their price assessments and, even with huge numbers of console sales, are simply not making as much money as they expected/needed to.  This is possible, but exceedingly unlikely.  While a console release is definitely expensive, it still seems too soon for them to have decided they are undercharging in their digital store in a specific region.

The second is greed.  Lots of people are buying, so raise the price.  Since it is not something they can get anywhere else, they have to pay it regardless.  This reason seems more likely, especially considering the not-answer given as to why they would raise prices.

All of this is really just speculation, but the steadily increasing trend of business taking a more direct hand in how gaming companies operate seems to support it.  This is not a condemnation, it is a plea.

Be honest with us.

If you are doing something to make money, just say it.  If you are doing something because a complication came up you did not expect?  Say so.  The continuing stream of meaningless corporate language sounds to us exactly the way it is designed to sound to you: intentionally vague.

Until they can at least be honest and open with us about why such a simple price increase is happening?  Buyer beware.