The biggest news of the week in gaming so far has undoubtedly been the substantial rise in Game Pass pricing announced by Microsoft. Game Pass for console is being removed as an option for new users; Core’s annual price has been increased from $59.99 to $74.99; PC Game Pass’s monthly fee has risen from $9.99 to $11.99; and Ultimate is now going to cost $19.99, up from $16.99. Additionally, a new ‘Standard’ tier has been introduced at $14.99, featuring just online multiplayer and around 25 games from the back catalog.
Microsoft has been a bit ambiguous about Game Pass pricing changes. In court, while fighting the Federal Trade Commission on the Activision Blizzard merger, lawyers said last June that there wouldn’t be any increase following the closing. In September, though, Microsoft Gaming CEO Phil Spencer admitted a hike would be inevitable at some point in the future.
It’s fair to say that most fans were expecting a price increase following the addition of Call of Duty, which is rumored to be imminent. Is this the right move from Microsoft, though, and should we expect any more changes in the foreseeable future?
We asked MIDiA Research games analyst Rhys Elliott to share his opinion with Wccftech on the subject. Here’s what he told us:
Xbox has largely maximized its subscriber base on console, so it’s looking to maximize average revenue per paying user (ARPPU) and onboard new subscribers with the higher pricing precedent. Call of Duty is about to bring more subscribers, so the timing makes sense. Expect more price increases in the future. The PC price increase suggests growth is starting to saturate there, too. Peeling PC players away from Steam is nigh on impossible…
GP Console doesn’t grant day-one online access to non-F2P games like CoD (Ultimate does), so the OG tier is basically a confusing legacy tier that doesn’t fit the new direction. Xbox has been hiding GP Console on its store lately, so the writing has been on the wall for a while.
A replacement for Game Pass Console, Standard is basically Game Pass Core with a bigger games library (and no first-party day one). This tier is Xbox’s half-step from core to Ultimate. Removing the day-one stuff also retrains some Ultimate holdouts to buy new premium games again, again increasing ARPPU. Cannibalized premium revenues have been a massive opportunity cost for Xbox (slightly offset by paid early access).
At the end of the day, these changes reflect Xbox’s recent strategy: upselling fans to Ultimate and increasing ARPPU ahead of the company’s huge off-platform mobile/cloud push. PC and console will remain important, but those markets are reaching saturation, and Xbox needs growth (it’s a public company in the time of big-tech efficiency and cuts). Xbox’s big platform-agnostic play continues.
Indeed, Elliott is right to point to the mobile push. Microsoft said it will launch its Xbox mobile store via the Web at some point this month, and that’s where it’ll try to vastly expand the total addressable market for its games.
On the upside, more games than just Call of Duty are reportedly coming soon from Activision Blizzard to Game Pass, including Crash Bandicoot N. Sane Trilogy, Spyro Reignited Trilogy and Tony Hawk’s Pro Skater 1+2. Is that worth the higher price, though? Tell us in the comments and throw your vote in the poll below.
