Ripple effect: Xbox Game Pass once looked poised to reshape the economics of gaming, but multiple price hikes in recent years have softened its appeal. Microsoft's strategy has come under added strain since they began bundling launch-day Call of Duty titles with the service, and recent signals suggest a course correction may be imminent, with more clarity expected in the coming weeks.
An internal memo obtained by The Verge shows Xbox's new CEO, Asha Sharma, acknowledging that Game Pass has grown too expensive. Microsoft is now exploring lower-cost subscription tiers, though no firm timeline has been set.
Sharma emphasized that Game Pass remains central to Xbox's value proposition, but said it needs to deliver "a better value equation." The CEO aims to begin testing a more flexible system and will discuss the issue further with Xbox employees next week.
At the same time, sources speaking to Windows Central say Microsoft is weighing whether to remove Call of Duty from Game Pass. The franchise was added in 2024, a move that reportedly cost Microsoft and Activision about $300 million in lost sales that year.
Recouping those costs might have been a primary factor behind last year's 50% price hike for Xbox Game Pass Ultimate and 40% price increase for PC Game Pass. The company attempted to soften the blow with additional content to increase the subscription's value, but the hikes may have contributed to record cancellation levels.
Sharma's memo echoes recent remarks from Netflix co-CEO Greg Peters, who, after speaking with Sharma, predicted that she will invest more in growing Game Pass. Separate reports also point to new, cheaper tiers being part of that effort.
Today, Game Pass starts at $10 per month, though the base plan includes only around 50 games. Higher tiers expand the library into the hundreds, with pricing ranging from $15 to $30 per month.
Prior reports offer a glimpse of what a lower-cost approach might look like. Talk of an ad-supported plan with a sub-$10 monthly subscription has circulated since 2022, and Microsoft may also be testing a free, ad-supported option for Xbox Cloud Gaming.
Users would be limited to a few hours of gameplay per month, possibly as little as one hour per session, but these numbers could change if the company proceeds with the idea.