This week, Microsoft raised prices on Xbox Game Pass to a genuinely shocking degree, following similarly large hikes on all of its current-generation hardware. While it’s tough times in the economy to be sure, that’s also true on the consumer side, and what Xbox is doing here is now completely incomprehensible.
While other competitors like Sony finally did give in and raise hardware prices due to tariff issues imposed by the Trump administration, Xbox has now done so twice, the end result being an Xbox Series X that costs $600, $100 more than it did at launch five years ago, and an $800 Xbox Series X 2TB, a direct competitor to the more powerful PS5 Pro, which now costs $50 less.
Xbox has no real space to do this, given that it has already been losing the console sales war badly this generation, as it did the last. Microsoft no longer reports exact Xbox hardware sales numbers, but if this generation started at around a 2:1 ratio against Sony as estimated, persistent quarterly declines have now made that far more lopsided.
The Xbox Games Pass price hike feels diametrically opposed to a constant refrain from Microsoft that, despite seemingly huge costs and forgone game sales, Game Pass is profitable. If that’s true, then either this is a huge, greedy grab with loyal consumers, trying to squeeze them to an unprecedented degree to further margins. Or Xbox Game Pass is not nearly as profitable as they’re letting on, and they need to do this, especially since it’s clear they are rapidly approaching a ceiling where over time subscription numbers are going to flatline once the market for a service like this is tapped. If that’s the case, it would be more desperate than greedy. Neither option is good.
The end result here seems like a company that is actively trying to repel players, be they existing or new ones. Why would you ever buy a more expensive Xbox, less powerful Xbox over a rival from PlayStation? Why would you agree to a $360 a year subscription service that jumped 50% in an instant with no coherent justification for that? And this is not even addressing another big issue over the course of the past year, which is Xbox doling out loads of its games to PlayStation, PC and occasionally Nintendo Switch, meaning having an Xbox console or staying in the Xbox ecosystem feels unnecessary.
I do not think it is impossible for Microsoft to be a big gaming leader by leaning almost exclusively into Game Pass, but that would require:
1) Enough high-quality, first-party games each year to be worth it
2) The ability to partner with bigger third-party games that also launch on the service
3) A desire to keep most of this locked into Game Pass, not spread through four different platforms
4) A non-absurd price, as even if it did all that, $30 a month is one of the most expensive media subscriptions in the market
Right now, it has none of those things going for it, and unless something changes, this grand experiment does not seem like it will have long-term legs going forward, and I am starting to legitimately worry about the Xbox brand’s continued existence as a whole, given the decisions Microsoft has been making.
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