#210: Overinflated

Folks! Hi! Before we get started, some brief housekeeping. Firstly, if I’ve done this right, you should be seeing the new Hit Points logo, designed by long-serving Edge art editor Andrew Hind, for the first time in today’s edition. I hope you like it as much as I do (and that it isn’t as massive in your email client as it looked just now in a web browser).

Secondly! I have had a quick fiddle around in the Hit Points backend — sorry, might have phrased that better — and for the next two weeks, paid subscriptions are available in US dollars. I am conscious that overseas card fees may be stopping overseas readers from taking the plunge, and helping keep the lights on at Hit Points Towers. So, for two weeks only, a paid sub costs $5 a month. Might do a couple of weeks of euros after that, as a fun experiment. Right! Let’s get to work.

Last August, when Hit Points was supposed to be on holiday, I wrote a somewhat spittle-flecked take on Sony’s decision to jack up the price of PS5 in most major territories except the US. Let us boot up the special Hit Points time machine for a moment:

“Yes, global inflation is rampant, currency markets are in severe flux, and the global tech industry is still trying to claw its way back to pre-pandemic levels of component supply. All of these things have, I am sure, eaten into whatever profit margin Sony designed PS5’s original pricing structure around. But Sony has, like any multinational, had to contend with inflation, currency movements and supply fluctuations since the day it began selling its products across borders. It is the cost of doing business internationally, and t’was ever thus.

“Perhaps a situation quite like this is unprecedented, but consumers have their own crosses to bear right now. They are looking at skyrocketing energy bills, at enormous price rises at the petrol pumps and supermarket checkouts. The things we require to live our normal lives are multiplying in cost at a horrifying rate. Feeling the pinch, Sony, at the way your everyday essentials are getting more expensive? Come look at my fucking gas bill, then tell me why I should be the one to shoulder your financial burden.”

Well. Today Microsoft has announced that it is increasing the price of Xbox Series X in just about every global market (the US, Japan, Chile, Brazil and Colombia appear to be the only exceptions). It is also increasing subscription fees for both the vanilla and Ultimate flavours of Xbox Game Pass in 40 countries, including the US. Xbox Series S, and PC Game Pass, remain unchanged worldwide. Since Hit Points is an equal-opportunity snark factory, I suppose we shall spend today’s edition getting into this a bit.

Now, look. We knew this was in the post. Fuel costs may have come down a little but inflation is still a huge concern — as I write this, the Bank Of England just raised interest rates for the 13th consecutive time in a bid to counter it — and the cost-of-living crisis is still very much a thing. (A friend of mine (hi Sam!) just remortgaged and his monthly repayment has increased by over £1,000.) The cost of just about everything is still rising, and Phil Spencer admitted last year that the price of both hardware and Game Pass, which has been unchanged since the service launched in 2017, would have to go up at some point. And sure, the clock started ticking on an Xbox price bump the moment Sony made its move with PS5. So no, none of today’s news is particularly surprising.

Nor are the two situations entirely similar. Sony moved at a time when PS5 was still reasonably supply-constrained; it felt a bit like it had seen all the bot-scalping that was going on and thought, cor, that looks fun. There was a ‘fuck you, pay me’ vibe to it that I don’t think applies here, at least not to the same extent. Indeed, Microsoft probably deserves some credit for holding out this long. Ten months is a long time when price inflation is in the double digits in some of your biggest markets.

But also, also: no. That line from last August about my gas bill is even more applicable here, I reckon, given that Microsoft is 20 times the size of Sony in terms of market cap and, last quarter, had $100bn in cash in the bank. Like, I think it could probably have held out a bit longer than it has, maybe? If it really wanted to? Gun to my head, if you asked me who would be better equipped to weather a financial crisis, I’d probably back the $2tn company over the console-buying public.

My bigger problem with it, though, is the timing. Microsoft could never have justified a price increase at the same time as Sony’s last year because, quite frankly, it had very little to actually sell. With no disrespect to the excellent Pentiment, I do not think it alone could have made it easier to swallow a 7% spike in the cost of a console to play it on. Hell, even last month, when Spencer was prostrating himself on bended knee over Xbox’s abject firstparty track record and the botched launch of Redfall, a price increase would have seemed ludicrous.

But now, just ten days after Microsoft’s best E3 in years — when that expensively assembled firstparty studio network is finally starting to come good, and Starfield, one of the most eagerly anticipated games of the generation, is mere months away — the landscape is different, and I guess the bean-counters at Microsoft have decided now is the best time to pull the trigger. This is, at best, very unfortunate timing. At worst, it simply looks callous.

Last week, for the first time in who knows how long, I actually wrote something nice about Microsoft, and then this happens? Lads. Gang. You held out for ten months. You could at least have given us another couple of weeks in the sunshine before you summoned the capitalist storm cloud.

MORE!

• Just when we thought it was all over, not-E3 returns! I might get a little deeper into yesterday’s Nintendo Direct with paid subs in tomorrow’s edition. You can watch the whole thing here, if you’ve somehow not seen it yet. New 2D Mario, eh? And even more remakes. Hmm.
• Roblox has opened itself up to somewhat more ‘adult’ experiences, with a new 17+ rating applying to #content featuring “violence, blood or crude humour.” Presumably this is less about new user acquisition and more designed for the retention of existing fans who, time being what it is, will eventually age out of the (mostly) kid-friendly nonsense that dominates the platform. Players will need to verify their age with a government-issued ID before they can access adult content; given Roblox’s historically lax attitude to this sort of thing, however, I am sure your eight-year-old nephew will be watching some staggeringly inappropriate Roblox grot before long.
• Microsoft and associated industry bods are up in front of the FTC this week, but that’s not all that’s going on in Acquisition Blizzard-land. Lawyers in a separate court case, brought by a group of consumers calling for the deal to be blocked, have claimed they have an internal Microsoft email that contains “uncontroverted evidence that Microsoft had the intention to put its main competition, the Sony PlayStation, out of the market.” The email, sent by Xbox Game Studios bossman Matt ‘Age Of’ Booty to Xbox CFO Tim Stuart, is from 2019, which some will tell you renders it meaningless since it predates the acquisition. Not sure about that one, myself — I enjoyed a well-mixed Old Fashioned in 2019, and still do today — but I am obviously not a lawyer. I mix a good cocktail, though. Just wanted to make that clear.
• EA is restructuring its development studios into two organisations, EA Entertainment and EA Sports. Not sure what to make of this; my initial reaction to something like this is usually that it’s laying the groundwork for a sale, but I can’t see gleaming automaton Andrew Wilson flogging FUT unless the price on offer is absolutely insane.
• Ubisoft CEO Yves Guillemot has revealed that Nintendo advised against releasing Mario + Rabbids: Sparks Of Hope on Switch, instead suggesting it should be held back for the console’s eventual successor. “We were a bit too early, we should have waited,” he said. “We think [the game] will last for ten years, because we will update it for the new machine that will come in the future.”
• Geoff Keighley has acknowledged, sort of, Summer Game Fest’s diversity problem, revealing that a woman — one woman — was scheduled to appear but did a Sue Cook at the 11th hour. Righto.

That’ll do, I think! Paid subs, I’ll see you tomorrow. If the rest of you would like to join us, kindly note the below button. Cheerio!