Microsoft Raises Xbox Game Pass Price by 50% Amidst Revenue Concerns
Microsoft Corp. has raised the price of its top-tier Xbox Game Pass subscription by 50%, to $30 a month. This move comes eight years after the service's launch and follows a shift towards streaming that has not met revenue expectations.
Initially priced at $10 a month in 2017, Xbox Game Pass offered over 100 older games and later added new titles at no extra cost. However, the recent price hike suggests that the service's growth and revenue generation have not met Microsoft's targets.
The shift towards Game Pass has led to a significant loss in sales for high-margin games like Call of Duty. Xbox gave up more than $300 million in sales of Call of Duty on console and PCs last year due to this shift. Despite Microsoft's acquisition of Activision Blizzard in 2023, which was partly motivated by the desire to acquire new titles for Game Pass, the service has not delivered the explosive growth Microsoft anticipated, according to Joost Van Dreunen, founder of the video-game analytics firm Aldora.
The price increase was met with swift online reaction, including criticism from California Governor Gavin Newsom and video game retailer GameStop Corp. Industrywide, subscription revenue in the games industry was up 16%, partly due to customers playing new games like Call of Duty on Game Pass. However, Sony's PlayStation accounted for 82% of Call of Duty sales in the US last year, indicating that the impact of Game Pass on sales is not evenly distributed across platforms.
Microsoft's price increase for Xbox Game Pass signals a shift in strategy for the service, which has not generated the desired revenue despite its growth in popularity. The impact of the service on sales of high-margin games like Call of Duty remains a concern, and the reaction from industry figures and customers indicates that the changes to the service are being closely watched.
Read also:
- Germany Launches HoLa Project for Megawatt Charging on A2 Motorway
- Transforming Digital Inventories in the Food Industry: A Comprehensive Guide for Food Businesses
- Canada's Transportation Revolution: Hyperloop & Electric Air Taxis by 2026
- ACC Expands European Battery Production with Three New Gigafactories
