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

Kris Erickson • Aug 17, 2009 • Comments (6)

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:

News
Games
Gear

Comments

Jonah Falcon

- August 17, 2009 10:24 AM

Nintendo raised the price of the Wii in March due to the same reason.

Josh Dargie

- August 17, 2009 12:24 PM

Yet they refuse to lower the price when the currency xchange makes them money...

This is just greed... You know when your in an international business that this happens, you shouldn't be forcing consumers to deal with the problems the economy has, If they are raising the price, add something to make it fair, dont take stuff out!

Julikator

- August 17, 2009 12:54 PM

So whats the difference between this and Activisions move?

They could raise the price of new games to 100$ because thats what most other countries in europe are already paying for, 70€ here in Germany.

And it works, Germany is Europes new "biggest market".

http://kotaku.com/5338700/and-europes-new-biggest-market-is

So, from a business standpoint it makes absolutely sense to raise the price. And thats what i expect not only from Activison but from a lot of other companies as well in the future.

You can bitch all you want, you'd do the same if you see that your games sell for more money in other countries.

I'll still import my games from the UK as long as its cheaper.

teh Donkey Kong

- August 17, 2009 1:09 PM

Terrible news. I really hope Sony doesn't follow up on this. It could be a great opportunity for the PS3 to increase the install base. Imagine if the 'Slim' hit the UK during the holiday season with a $50-$100 cheaper price tag than the 360.

Legion

- August 17, 2009 1:29 PM

In the financial world, you don't deal in pounds, but in euros or dollars.
If the pound are worth less, they have to increase the ammount of pounds to balance the difference.
That's the cost of living.
It's even worse when you live in a country that has a weaker currency.

DCBrono

- August 17, 2009 2:35 PM

Good info. Thanks.

Xboxist

The GameFlavor Network