Microsoft recently unveiled substantial alterations to Xbox Game Pass, most notably a 50% price hike for Game Pass Ultimate, elevating its monthly cost to $30. However, an industry analyst suggests these might not be the final adjustments to the subscription service.
Daniel Ahmad, an analyst at Niko Partners, indicates that Microsoft is banking on its current console user base maintaining their commitment to Game Pass despite the increased cost. Simultaneously, the company plans to broaden its game releases to competing platforms such as PS5 and the upcoming Switch 2, alongside its existing presence in the PC gaming sector. Ahmad also floated the idea of Microsoft introducing an ad-supported Game Pass tier to ensure the service`s long-term viability.
Ahmad explained, “Xbox`s main challenge right now involves navigating the shift from a proprietary console-centric environment to an inclusive, multi-device ecosystem. Console sales have seen a notable decline, PC Game Pass adoption has progressed slowly, and cloud gaming is still primarily viewed as supplementary to existing play methods, not a standalone gateway.”
He further elaborated, “Microsoft`s strategy hinges on the assumption that its existing console subscribers will stick with Game Pass, even with the raised prices (or current Premium tier costs). Concurrently, the company aims to boost growth on PC, PS5, and Switch 2 by offering fully priced day-one or later ports.”
Could an Ad-Supported Game Pass Tier Emerge?
Given these circumstances, the key question, according to Ahmad, is whether Game Pass can maintain its sustainability for Microsoft. He suggested the company might explore various avenues to expand Game Pass, potentially including the launch of an ad-supported subscription option.
“The critical inquiry moving forward,” Ahmad stated, “is whether Game Pass can be a viable offering beyond consoles and how to effectively engage that broader audience. This would likely necessitate a more affordable entry point, such as an `Essential` tier, along with trials of cloud-only, ad-supported, or mobile-first services.”
While Game Pass is anticipated to undergo further evolution, the actual implementation of ideas like an ad-supported tier, as proposed by Ahmad, is yet to be determined. The specifics of how such a tier might function are unclear. A historical parallel can be drawn to Square Enix`s Coreonline, an ad-supported streaming game service introduced in 2012, which was discontinued after 15 months due to insufficient user engagement.
Currently, Game Pass Ultimate`s monthly cost is increasing from $20 to $30. The former Core and Standard tiers have been rebranded as Essential and Premium, respectively, without any price increases. In exchange for the higher Ultimate subscription fee, members will receive additional benefits, including Fortnite Crew and Ubisoft+ Classics, along with an expanded game library.
These price adjustments for Game Pass Ultimate and PC Game Pass are timed just before the November launch of Call of Duty: Black Ops 7. Consequently, accessing Call of Duty via Game Pass this year will entail a higher cost for subscribers.