– Price increases correlated with subscriber decline; recent price cuts helped reverse that trend with acquisitions and improved retention.
– Price reduction led to a perceived improvement in growth and retention, signaling price sensitivity in Game Pass subscribers.
– Despite some recovery, questions remain about whether cheaper rates will meet revenue goals, with concerns about cannibalization of game sales and the Call of Duty exception.
Microsoft has not provided specifics on the impact of the Xbox Game Pass price increases. Still, a newly leaked private memo confirms that the higher rates led to a decline in subscribers. Tom Warren of The Verge (paywalled) reported that the internal communication also revealed that recent price cuts reversed that trend.
Pricing shifts and leadership notes
The message included guidance from Xbox CEO Asha Sharma, who earlier admitted that the subscription service had “become too expensive for players.” According to the executive, “Growth slowed down, and subscriber loss accelerated after the pricing and SKU changes last year.” However, she then explains, “Since our price reduction, we have seen acquisitions grow, and retention improve, which is a good first step.”
Past trends and 2024 updates
“Subscriber loss accelerated” hints at declines even before gamers faced higher costs. Sharma references last year, but Microsoft announced a prior Xbox Game Pass price increase in 2024. The Ultimate tier went from $16.99 per pet to $19.99 per month, while other plans also became costlier.
Previous adjustments drew criticism, but the October 2025 announcement was likely more damaging. Ultimate subscribers were asked to pay $29.99, with other tiers losing access to day-one releases. Shortly after Sharma took over as CEO in February, she authorized a drop to $22.99. PC users also benefited, but players lost access to future Call of Duty games.
Experiments and potential bundles
Xbox has explored other ways to boost the subscription service. Discord now offers a Starter Edition packaged with Nitro plans, which includes a limited selection of titles and cloud gaming. In addition, rumors have emerged about Netflix bundles and a standalone free cloud streaming option.
Despite the positive signs, it’s unclear whether the now-cheaper rates can meet revenue goals. Even if subscriber counts improve, Microsoft may not see a sufficient return on its investment. The Call of Duty exception should help, but concerns that Game Pass games are cannibalizing sales persist.
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