Xbox Flags Game Pass Pricing Reset as Costs and Strategy Shift

Microsoft is reportedly preparing changes to Xbox Game Pass after internal acknowledgment that the subscription has become too expensive for players. In a memo to staff, Executive Vice President and CEO of Microsoft Gaming, Asha Sharma, said the service needs “a better value equation.”

The remarks follow a 50% increase last year that pushed Game Pass Ultimate to $29.99 USD per month. Microsoft currently offers multiple tiers, from $9.99 Essential to higher-priced Premium and PC plans, but internal messaging suggests the current model is not final.

Sharma also noted that Game Pass remains central to Xbox’s value proposition, while indicating the system will evolve into a more flexible structure over time.

Game Pass Pricing Pressure Tied to Call of Duty Strategy

An essential factor behind rising costs is the inclusion of Call of Duty in the subscription after Microsoft’s Activision Blizzard acquisition. While the move increased engagement, it also reduced direct sales.

Meanwhile, Bloomberg reported that Xbox may have given up more than $300M in Call of Duty’s revenue across PC and console. The figure reflects growing tension between subscription growth and traditional retail performance.

Industry discussions and reports suggest Microsoft is also evaluating whether to keep Call of Duty in Game Pass. Likewise, Sharma referenced ongoing internal conversations and stated she would “go deeper” with employees after recent online speculation.

Game Pass growth has slowed from earlier highs, declining from 80% between 2020 and 2021 to 36% between 2022 and 2024. The service last reported 34M subscribers in February 2024. Despite generating nearly $5B in fiscal year (FY) 2025, the system faces increasing infrastructure and content costs.

Microsoft has positioned Game Pass as a long-term platform similar to streaming services. However, Sharma’s memo indicates a recalibration is underway, with content strategy, pricing, and flexibility all under review as Xbox works to sustain the model.