Xbox Game Pass: A Double-Edged Sword for Microsoft

In a surprising turn of events, Microsoft has announced a significant price increase for its Xbox Game Pass Ultimate subscription, raising it by 50% to $30 per month. This decision comes on the heels of revelations that the company reportedly lost an estimated $300 million in Call of Duty sales last year, a consequence of making the blockbuster title available on day one through Xbox Game Pass Ultimate and PC Game Pass.

According to internal estimates shared with Bloomberg by a former employee, the anticipated explosive growth of Game Pass post-Activision acquisition has not materialized as Microsoft had hoped. Joost Van Dreunen, founder of the video-game analytics firm Aldora, noted that the company’s infrastructure costs are not aligning with its pricing model, raising questions about the sustainability of Game Pass as a long-term strategy.

Originally launched in 2017 at a modest price of $10 per month, Xbox Game Pass aimed to revolutionize gaming by offering a Netflix-like model. Over the years, as new games began to be included at launch, the pricing structure evolved. The recent rebranding and restructuring of Game Pass tiers—now known as Game Pass Essential and Game Pass Premium—reflects Microsoft’s attempts to enhance value for subscribers, offering additional benefits such as access to PC games, cloud gaming, and even in-game perks from partners like Riot Games.

Despite these enhancements, the core appeal of Game Pass remains the availability of new titles on their release day. However, with the Ultimate tier now priced at $30, gamers may find themselves reconsidering the value proposition. The last reported subscriber count for Xbox Game Pass stood at 34 million as of February 2024, with Microsoft announcing that the service generated nearly $5 billion in revenue during the fiscal year ending June 30, 2025.

Controversy has surrounded Microsoft’s acquisition of Activision Blizzard, with former Federal Trade Commission Chair Lina Kahn expressing concerns over market consolidation and its impact on consumers. Kahn’s opposition to the deal highlighted fears that such dominance could lead to price hikes and reduced quality for gamers.

As Xbox navigates this complex landscape, the implications of its Game Pass strategy are becoming increasingly clear. While the service has undoubtedly attracted millions of subscribers, the financial losses from key franchises like Call of Duty raise questions about the long-term viability of such a model. As the gaming industry continues to evolve, Microsoft’s next steps will be critical in defining the future of Xbox Game Pass and its role in the broader gaming ecosystem.