You won’t find a better deal in gaming than Xbox Game Pass, but with Microsoft raising the price of the service, you might end up second-guessing it. I wouldn’t be surprised if the Xbox Game Pass price increases in the future because Microsoft and Xbox have hinted at more problems. What’s the deal? Xbox Game Pass’s price is going up for a few reasons.
1. Acquisitions are Microsoft’s focus
Because of Activision Blizzard’s acquisition and legal troubles, Xbox Game Pass’ cost has increased and is likely to keep going up. Following their purchase of Bethesda for $7.5 billion, Microsoft tried buying Activision Blizzard for $69 billion, which got the attention of regulators. Legal battles resulted from the CMA and FTC blocking Activision Blizzard’s acquisition.
Interestingly, these court rulings revealed a key piece of Xbox Game Pass information. Xbox says it won’t raise Xbox Game Pass prices despite the planned acquisitions, according to TweakTown.
Yet Xbox still raised prices in June 2023, right as Activision Blizzard was being bought out. The $69 billion deal passed but Game Pass prices rose right before it, so it’s a win-win. Regulators are delaying and blocking Xbox’s Activision Blizzard deal, making its financial woes worse.
In light of this, you may already be seeing an increase in Game Pass prices in June because of Activision Blizzard’s expected cost. Considering the deal is tangled up in legal battles and court hearings, the acquisition might affect Xbox Game Pass and how much you pay.
2. Developing modern games is expensive
Xbox Game Pass prices are likely to increase not just because of Microsoft but also because game development costs are going up. It’s no secret that video game production costs are skyrocketing, with Halo Infinite, one of the biggest Xbox staples, costing over $200 million to make and Final Fantasy XVI developers saying a number-one Final Fantasy game could cost “upwards of $100 million.”
It cost $60 million to develop, even compared to Halo 3 for Xbox 360. What does Xbox Game Pass have to do with this? It’s important to have as many players as possible for games with such high costs. There’s also a lot of pressure on Xbox Game Pass to make games profitable since the company pushes it just as hard as first-person exclusives. Game development and licensing may get more expensive because of rising costs.
Considering how much Xbox Game Pass is emphasized, it’s almost inevitable that licensing fees will go up and developers will exert more pressure to make it profitable. Game Pass license fees have already cost Microsoft “hundreds of millions of dollars” according to Gamespot.
Although rising development costs put pressure on gaming as a whole, Xbox Game Pass might see a price hike because of a more expensive industry.
3. Restrictions on Xbox Game Pass
The profitability of Xbox Game Pass is another factor that may increase Xbox Game Pass prices even further due to rising costs.
Xbox Game Pass has been the subject of countless internet rumors. It varies depending on who you ask, from Microsoft losing money on the service to it being the most profitable game service ever. More facts are coming out because of the CMA investigation.
It turns out that Xbox Game Pass caused a “decrease in base game sales” after it was added to the service, according to GamesIndustry.biz. The issue gets even worse when you combine this with the previous point about the industry growing to have gigantic costs.
Xbox Game Pass reduces sales if it releases a title on it, not just because games are more expensive to make. Xbox and developers are on the losing end of this in terms of profitability. There’s a noticeable difference between Xbox Game Pass and PlayStation Plus. In terms of platform as a whole, PlayStation’s subscription service is much less integral.
Despite the tight ties between Xbox Game Pass and its identity and games, your monthly fees may rise over time as the company lacks sales and costs go up.
4. There’s no way Xbox can compete on price
Microsoft may just be trying to match the price of competitors when it raises Xbox Game Pass pricing in June 2023.
The Verge pointed out that Xbox stated it “adjusted the prices to reflect the competitive conditions in each market” after announcing the price hike. Honestly, Microsoft’s consoles have done exactly that, with Xbox Series X prices matching PlayStation 5 prices in most countries.
The Xbox Game Pass pricing seems less competitive when you look at the price hikes. PlayStation Plus Extra goes for $14.99 a month, but Xbox Game Pass Ultimate goes for $16.99. Game Pass Ultimate is closer in price to PlayStation Plus Extra than PlayStation Plus Premium, even though PlayStation Plus Premium costs $17.99 a month. It’s more like an attempt to match PlayStation Plus’ high tier costs.
While Xbox might have increased its prices to match its competitors, matching the highest price ranges isn’t good news for Xbox Game Pass. If competitors like PlayStation increase pricing, Xbox will probably need to continue raising prices.
5. There’s a plateau coming for Xbox Game Pass
Due to its limited population, Xbox Game Pass’s price is likely to keep going up. Is it possible to have Xbox Game Pass if there’s a lot of Xbox users? If Xbox Game Pass runs out of new subscribers, it could be disastrous for a service that relies on subscribers to make money.
According to The Verge, Xbox’s Phil Spencer addressed this issue at the WSJ Tech Live conference. He said he’s seen the growth of Game Pass on consoles “slow down” over time and that at some point the service will reach everyone who wants it.
Consequently, Spencer even talked about Xbox raising a few prices. As a result, he also said PC Game Pass isn’t slowing down anytime soon. PC Game Pass will inevitably face the same issues, even though it looks good right now.
Eventually, Xbox Game Pass will hit a plateau as well since PC Game Pass also has a plateau. Microsoft is looking to maintain profitability as it continues to increase Xbox Game Pass prices, so there’s almost a guarantee you’ll see more price increases.
Xbox Game Pass faces challenges in the future
It has a lot of obstacles to overcome, and many of them involve price adjustments in some form or another, whether it’s rising costs, acquisition pressure, or even becoming a victim of its users.
As time goes on, you’ll probably have to readjust your view of Xbox Game Pass as the service grows. Ultimately, the service will keep changing along with Xbox and the industry.