Xboxist

Why is MS Increasing the Price of Xbox 360 in UK?

Microsoft may seem a bit like the Grinch who stole Christmas for consumers in the UK this year. Today it was announced by several large retailers in the United Kingdom that Microsoft plans to increase the price of its Xbox 360 Arcade console from £129.99 to £159.99 (bringing it to $259 USD). Not only that, but the company plans to strip the five crappy XBLA games that were previously included in the Arcade bundle. Spokespeople for retail shops also said that Microsoft will bump up the price of selected Xbox 360 accessories by one or two pounds. Great, that probably means that gamers in the UK can look forward to an even more expensive Wifi Adaptor, headset and external hard drive. This is disappointing news, particularly in the wake of a PS3 Price Drop in Europe.

Has Microsoft just taken a page from Bobby Kotick's book and gone completely insane? No, as it turns out. This substantial increase in price is due to differences in the exchange rate between the British Pound (which has weakened in recent months) and the Euro/dollar which have remained strong. That means that in order to organize shipping, advertising, and retail distribution in the UK, Microsoft needs to charge more in pounds in order to recoup the difference in Euros. Does that make sense? Think of it this way: if you were getting paid in British Pounds for a job in the UK, you would want to get paid more if the currency suddenly dropped compared to your home country, right?

Still, this sucks for UK consumers, who are already sick of paying higher prices for games and related accessories. Those of you who've already grabbed an Xbox 360 at the lower price must be feeling pretty good about yourselves! However, you Sony folks better not get too smug: Microsoft's brave move opens the door for other game manufacturers to do exactly the same thing.

Here is a chart showing the price of the British Pound dropping against the Euro: