Game Pass success story: It turns out that when you make things cheaper, more people will buy them
Sometimes, if you want people to buy more of something, lowering the price can be an effective way of making it happen. This theory of economics has been put to the test with Microsoft’s Xbox Game Pass, a subscription service that has seen a surge in popularity after recent price adjustments. According to an internal memo shared with The Verge, Xbox CEO Asha Sharma noted that the changes have had a positive impact on growth and retention.
In April, Sharma acknowledged that the Xbox Game Pass had faced challenges after a significant price increase in October 2025. The top-tier Game Pass Ultimate subscription saw a 50% hike, jumping from $19.99 to $29.99 per month. However, just a week after Sharma’s comments, the prices were adjusted downward. While they remained higher than before the October 2025 increase—such as the $22.99 monthly rate for Game Pass Ultimate—this move came with trade-offs. For example, Call of Duty games are no longer available on Game Pass at launch, instead being added about a year later, roughly when the next annual Call of Duty title is released.
Despite these changes, Sharma pointed out that the price reduction has led to improved results. “Growth slowed down and subscriber loss accelerated after the pricing and SKU changes last year,” she wrote in the memo. “Since our price reduction, we have seen acquisitions grow and retention improve, which is a good first step.” This suggests that the move has helped in reversing the negative trend and attracting more users to the service.
However, Sharma also emphasized that this is just the beginning of a larger effort. “We will not solve this in one moment or one launch,” she continued. “We will have to outwork the problem in front of us in our path to restore durable growth.” This indicates that the company is aware of the long-term challenges and is committed to addressing them through continuous improvement and innovation.
The issue of affordability has been a significant concern for many Xbox users. While $360 per year might still be a good deal for hardcore gamers who play multiple new releases each month, it can feel like a larger financial commitment for casual players who only engage with a handful of games annually. The high cost can also be a deterrent, especially when comparing it to the potential savings from a good Steam sale.
Looking ahead, it remains to be seen where Xbox Game Pass will go from here. However, one possibility is a greater emphasis on ads. Rumors of an ad-supported Xbox Cloud Gaming service surfaced shortly after the Game Pass price hikes, and it’s not surprising if something similar is considered for the subscription itself.
Sharma also mentioned the recent rebranding of Xbox to XBOX, stating that it “reflects a decision to be deliberate in how we show up for the players who care most about this brand.” While this change is part of Microsoft’s broader strategy, it’s clear that the focus remains on delivering value to its users through Game Pass and other services.
