Microsoft ’s Xbox division recently announced a 50% price increase for its premium Game Pass subscription service, raising the cost to $30 per month—a move that suggests the company's ambitious streaming strategy is failing to meet revenue expectations, a report has said. This is despite Microsoft adding blockbuster titles to the service like Call of Duty , which came with the company's $69 billion acquisition of Activision Blizzard in 2023.
Citing interviews with seven current and former Xbox employees, Bloomberg reports that the price hike, which drew swift backlash online, is the latest sign that Xbox's streaming push has underperformed eight years after launch. They also point that the strategy of including higher-margin games in Game Pass is undermining their sales
Call of Duty ‘cost’ Xbox $300 million in console sales
Citing a former employee, the report claims that Xbox sacrificed more than $300 million in Call of Duty sales on consoles and PCs last year by including the franchise on Game Pass. Although Call of Duty: Black Ops 6 became the top-selling video game in the US last year and the biggest launch in franchise history, Sony's PlayStation accounted for 82% of those sales, according to trade publication IGN.
The game's inclusion on Game Pass may have prompted some customers to subscribe for a month or two rather than purchasing the title outright for $70.
“Game Pass hasn't delivered the explosive growth Microsoft anticipated post-Activision, and they've realized their infrastructure costs don't align with their pricing model,” said Joost Van Dreunen, founder of video game analytics firm Aldora Intelligence .
According to current and former employees, Microsoft launched Game Pass in 2017 at $10 per month, offering access to over 100 older titles. A year later, the company made a decision to include its own new games on release day at no extra charge—a move that proved controversial internally.
While subscription revenue increased 16% industry-wide last year, partly due to customers playing Call of Duty on Game Pass according to IGN, the model appears to be cannibalising traditional game sales without generating sufficient replacement revenue.
Citing interviews with seven current and former Xbox employees, Bloomberg reports that the price hike, which drew swift backlash online, is the latest sign that Xbox's streaming push has underperformed eight years after launch. They also point that the strategy of including higher-margin games in Game Pass is undermining their sales
Call of Duty ‘cost’ Xbox $300 million in console sales
Citing a former employee, the report claims that Xbox sacrificed more than $300 million in Call of Duty sales on consoles and PCs last year by including the franchise on Game Pass. Although Call of Duty: Black Ops 6 became the top-selling video game in the US last year and the biggest launch in franchise history, Sony's PlayStation accounted for 82% of those sales, according to trade publication IGN.
The game's inclusion on Game Pass may have prompted some customers to subscribe for a month or two rather than purchasing the title outright for $70.
“Game Pass hasn't delivered the explosive growth Microsoft anticipated post-Activision, and they've realized their infrastructure costs don't align with their pricing model,” said Joost Van Dreunen, founder of video game analytics firm Aldora Intelligence .
According to current and former employees, Microsoft launched Game Pass in 2017 at $10 per month, offering access to over 100 older titles. A year later, the company made a decision to include its own new games on release day at no extra charge—a move that proved controversial internally.
While subscription revenue increased 16% industry-wide last year, partly due to customers playing Call of Duty on Game Pass according to IGN, the model appears to be cannibalising traditional game sales without generating sufficient replacement revenue.
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