Microsoft recently announced substantial changes to Xbox Game Pass, most notably a 50% price increase for Game Pass Ultimate, raising its monthly cost to $30. However, these changes may not be the last, according to industry expert Daniel Ahmad, an analyst at Niko Partners.
Ahmad suggests that Microsoft is banking on the continued loyalty of its console players to Game Pass, even at a higher price point. Simultaneously, the company is increasing its game releases on rival platforms such as PS5 and the upcoming Switch 2, alongside its existing presence in the PC market. Ahmad also proposed that Microsoft might explore an ad-supported tier for Game Pass to ensure the subscription service`s long-term viability.
He elaborated on Xbox`s current challenges, stating:
“The primary concern for Xbox at this time is managing the transition from a closed-console-based ecosystem to an open multi-device ecosystem. Console sales have dropped considerably, PC Game Pass uptake has been slow, and cloud is still seen as an extension of existing play, rather than a primary entry point.”
Ahmad further added:
“The bet that Microsoft is making here is that its existing console base remains loyal to Game Pass at higher prices (or current prices with Premium), while it looks to ramp up growth on PC, PS5 and Switch 2 via day one / late ports that are fully priced.”
The Potential for an Ad-Supported Game Pass Tier
Ahmad questions whether Game Pass can remain sustainable for Microsoft given these evolving circumstances. He believes the company might explore various avenues to foster future growth for Game Pass, including the introduction of an ad-supported subscription tier.
“The big question going forward is if Game Pass can be a sustainable product off console and how best they can reach this audience. At the very least that`s going to require a lower entry cost (Essential) and experimentation with cloud only, ad supported, or mobile-first offerings,” he explained.
While Game Pass is expected to continue evolving, it remains uncertain if suggestions like an ad-supported tier will materialize. The exact implementation of such a tier is currently unknown. It`s worth noting that Square Enix attempted a similar ad-based streaming game service called Coreonline in 2012, which was discontinued after 15 months due to low player engagement.
For the immediate future, Game Pass Ultimate`s price has risen from $20 to $30 per month. Meanwhile, the Core and Standard tiers have been renamed Essential and Premium, respectively, without any price increases. Subscribers to the increased-price Ultimate tier will now benefit from additions like Fortnite Crew and Ubisoft+ Classics, along with a larger library of games.
These price adjustments for Game Pass Ultimate and PC Game Pass precede the November release of Call of Duty: Black Ops 7. Consequently, playing Call of Duty this year via Game Pass will be more expensive.