As people decide what to spend their money on as costs increase, activities like gaming become secondary priorities.
"Gaming is clearly a luxury activity," Microsoft Gaming CEO Phil Spencer said to Cheddar News. "We're not the things that families have to first and foremost take care of — your family, food, shelter, those kinds of things."
At the same time, internal research says that gaming can bring families together, he pointed out. With families balancing budgets this time of year, gaming could be a great way to balance budgets and entertainment.
"Over half the parents that we talk to say that they love to bring their childhood gaming memories to their family, to their kids, to play with their kids," he said. "It's a good value for money when you think about the time that you can spend together and playing and what that actually costs you to play."
According to a PBS NewsHour/NPR/Marist poll, 45 percent of people surveyed said they hadn't cut overall spending — yet. However more than two-thirds said their financial situation had worsened compared to last year. About 72 percent said they cut back on at least one item to make ends meet over the last six months.
At the same time, internal research says that gaming can bring families together, he pointed out. With families balancing budgets this time of year, gaming could be a great way to balance budgets and entertainment.
"Over half the parents that we talk to say that they love to bring their childhood gaming memories to their family, to their kids, to play with their kids," he said. "It's a good value for money when you think about the time that you can spend together and playing and what that actually costs you to play."
According to a PBS NewsHour/NPR/Marist poll, 45 percent of people surveyed said they hadn't cut overall spending — yet. However more than two-thirds said their financial situation had worsened compared to last year. About 72 percent said they cut back on at least one item to make ends meet over the last six months.
In October, Microsoft Gaming announced it might have to increase the cost of its Xbox consoles and products to keep up with inflation. The company announced on Monday it would be increasing the price of first-party games for its Xbox Series X and S to $70 starting in 2023, according to IGN. Sony, Ubisoft, and Take-Two Interactive have already raised their price points to $70 as well.
While Specter didn't rule out raising the price of consoles in the new year, he did say for the holiday season pricing would remain the same. The Xbox Series S was discounted $50 during Black Friday from its regular $300 suggested manufacturing retail price tag. Combined with Game Pass, which accounts for 15 percent of gaming revenue, Spencer said it was good value.
"If you look at the overall combined growth rate over a three, four or five year period, you see gaming remains a durable activity," Spencer said. "Consumers love it. They spend where they love, and our business continues to grow. As we look at where we're trying to go, it's about bringing more access to more players in more different ways. We think we have a great proposition for gamers there."
While Specter didn't rule out raising the price of consoles in the new year, he did say for the holiday season pricing would remain the same. The Xbox Series S was discounted $50 during Black Friday from its regular $300 suggested manufacturing retail price tag. Combined with Game Pass, which accounts for 15 percent of gaming revenue, Spencer said it was good value.
"If you look at the overall combined growth rate over a three, four or five year period, you see gaming remains a durable activity," Spencer said. "Consumers love it. They spend where they love, and our business continues to grow. As we look at where we're trying to go, it's about bringing more access to more players in more different ways. We think we have a great proposition for gamers there."
It also means expanding further into casual gaming. Recently it added Minesweeper and Solitaire into Microsoft Teams. Part of the impetus for the Activision Blizzard Inc. acquisition — which, at $69 billion, would be the largest deal in gaming history — was due to its strength in mobile. While regulatory issues may have slowed it down, Spencer said the company always viewed it as an 18-month process and was happy to work with regulators.
"I remain very confident in where we are," he said. "For us in our business, the thing that really attracted us to Activision-Blizzard, King [Digital Entertainment], was the capability they have in mobile. Mobile is the largest platform where people play. We've been doing our own organic work with things like Minecraft to build mobile engagement, but they just have an amazing set of mobile properties that can really help us accelerate our business."
Anyone and every age can be a gamer. While gaming may be considered a "kid's activity" there's room for everyone - which can be great for business.
"People who were kids in the '70s grow up," Spencer said. "They like to share those memories with their family. They stay connected with their friends. There are three billion people on the planet that play video games. So clearly it's not one demographic. It's not one age demographic. Really, gaming is for everybody."
