Microsoft announced some significant changes for Xbox Game Pass today, headlined by a 50% price increase for Game Pass Ultimate, bringing it up to $30/month. But it may not be the last change for the service, according to at least one expert.
According to Niko Partners analyst Daniel Ahmad, Microsoft is betting that its console players stay loyal to Game Pass even at the higher price while the company continues to release more and more games on rival platforms like PS5 and Switch 2, in addition to its ongoing efforts in the PC market. Ahmad also suggested Microsoft could look at an ad-based tier for Game Pass to help the subscription service remain sustainable.
“The primary concern for Xbox at this time is managing the transition from a closed-console-based ecosystem to an open multi-device ecosystem. Console sales have dropped considerably, PC Game Pass uptake has been slow, and cloud is still seen as an extension of existing play, rather than a primary entry point,” he said.
“The bet that Microsoft is making here is that its existing console base remains loyal to Game Pass at higher prices (or current prices with Premium), while it looks to ramp up growth on PC, PS5 and Switch 2 via day one / late ports that are fully priced,” Ahmad added.
A Game Pass ad tier?
Can Game Pass remain sustainable for Microsoft against this backdrop? That’s the “big question,” Ahmad said. The company may look to a variety of sources to help grow Game Pass in the future, including by introducing an ad-supported tier, Ahmad said.
“The big question going forward is if Game Pass can be a sustainable product off console and how best they can reach this audience. At the very least that’s going to require a lower entry cost (Essential) and experimentation with cloud only, ad supported, or mobile-first offerings,” he said.
It’s expected that Game Pass will continue to evolve over time, but whether or not the things Ahmad said, like an ad tier, come to fruition remains to be seen. How an ad-based version of Game Pass could work is unknown. Back in 2012, Square Enix launched an ad-based streaming game service called Coreonline before killing it off 15 months later due to a lack of uptake from players.
For now, Game Pass Ultimate is going up in price from $20 to $30 per month, while the Core and Standard tiers have been renamed Essential and Premium (with no price hikes). For the increased price, Ultimate subscribers are getting Fortnite Crew and Ubisoft+ Classics added to their memberships, and a lot more games.
The price increases for Game Pass Ultimate and PC Game Pass come just ahead of the release of Call of Duty: Black Ops 7 in November. Given that, it’s going to be more expensive to play Call of Duty this year with Game Pass.
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