Microsoft’s new head of Xbox, Asha Sharma, told employees in an internal memo that the company’s Game Pass subscription service has become "too expensive" for players.
The memo, first published by The Verge, suggests that Microsoft is preparing to overhaul the pricing structure of its flagship subscription service.
Sharma stated that the service needs "a better value equation" to maintain its position in the market.
"Game Pass is central to gaming value on Xbox. It’s also clear that the current model isn’t the final one," Sharma wrote.
The announcement follows a period of significant price volatility for the service. Approximately six months ago, Microsoft increased the price of its top-tier Game Pass subscription by 50%, bringing the monthly cost to $30/£23. This 50% increase marked one of the most significant changes to the service's cost structure in recent years.
The current subscription lineup includes several tiers: Ultimate ($29.99 / £22.99 per month), Premium ($14.99 / £10.99 per month), Essential ($9.99 / £6.99 per month), and PC Game Pass ($16.49 / £13.49).
Sharma indicated that the company is looking toward a more adaptable future for the platform.
"Long term, we will evolve Game Pass into a more flexible system, which will take time to test and learn around," she wrote.
Call of Duty and revenue concerns
The recent price hikes were largely driven by the integration of massive titles like Call of Duty into the Game Pass ecosystem.
According to a Bloomberg report, these increases followed a period where Microsoft surrendered "more than $300 million in sales" of Call of Duty on consoles and PCs. A former employee noted that the revenue loss from the Call of Duty integration was a primary driver for the recent adjustments.
The financial impact of including blockbuster titles on the service has prompted discussions regarding the sustainability of the current model. Reports suggest Microsoft may even consider removing Call of Duty from the service in the future.
Sharma reportedly acknowledged these claims within her internal communication to staff. The Xbox executive stated she intends to "go deeper" with employees on these topics during meetings scheduled for next week.
