The world's largest software company Microsoft (MS) has significantly raised the sales price of its Xbox gaming console in the United States. Experts analyze this as an effect of the U.S.-China tariff war.
According to The Washington Post (WP) and others, MS has raised the price of the Xbox Series X for U.S. consumers from the previous $500 (700,395 won) to $600 (845,040 won) starting on 1st (local time). The lower-end Series S has also increased from $300 (422,520 won) to $380 (535,190 won).
Prices have also increased in Europe and Australia, but the increase is much smaller than in the United States. In Europe, the Series X rose by €50 to €599.99 (957,890 won), while in the United Kingdom, it was raised by £20 to £499.99 (936,460 won).
MS cited "market conditions and rising development expenses" as reasons for the price increase but did not answer questions about whether tariffs had an impact. The Xbox Series X was released in 2020. It is unprecedented for the price of a gaming console to significantly rise after several years.
Industry experts believe that MS is affected by the tariff war between the United States and China because the majority of its gaming consoles are produced in China. Matt Piscatella and Daniel Ahmad from market research firms Circana and Niko Partners interpreted that MS is responding to the U.S. government's imposition of a 145% tariff on China, where the Xbox is primarily manufactured. They noted, "What we expected is now happening, and we anticipate more of this in the future."
During the Trump administration in 2019, when the United States was considering imposing tariffs, MS sent a joint letter to the Office of the United States Trade Representative (USTR) along with its competitors Nintendo and Sony. The letter warned that 96% of video game consoles imported into the United States were manufactured in China and that tariffs could undermine years of investment in the global supply chain, harm consumers, and result in the loss of thousands of American jobs.
Subsequently, Nintendo diversified its production sites to other countries such as Vietnam and Cambodia. Sony raised the prices of its PlayStation consoles in Europe, Australia, and New Zealand last month, citing inflation and exchange rate fluctuations. Gamers expect that due to the trade war between the U.S. and China, prices in the United States will soon increase as well.