Phil Spencer Discusses Economic Resiliency of Game Industry

Spencer revealed that Xbox consoles are sold at a loss.

Spencer revealed that Xbox consoles are sold at a loss.

Last week, Phil Spencer, head of Microsoft’s Xbox division, spoke at the Wall Street Journal’s WSJ Tech Live conference in Laguna Beach, California about the state of his sector. According to Spencer, while the gaming industry has its self-contained ups and downs, it is at least somewhat resilient against economic downturns.

“It’s proven over years, at times of economic uncertainty for families, gaming is somewhat resilient to those issues,” Spencer said.

As proof of this, Spencer cited Xbox’s sales during the 2008 recession, noting that despite the overall economic hardship, Xbox actually had one of their best sales years ever.

That said, Spencer acknowledged that the state of the industry, at least as far as Xbox is concerned, isn’t perfect. For one thing, all Xbox consoles, particularly current line of Xbox Series X and Series S consoles are sold at a loss of around $200. The primary way Xbox has been making up for these losses is with their Xbox Game Pass service, which has seen a surge in new subscribers and usage in recent months thanks to its large library of new and popular games.

Spencer admitted that a time will likely come when both Xbox consoles and Game Pass will see a price hike to alleviate the company’s losses, but at the very least, such hikes aren’t coming this year.

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