Game Pass is now a hard pass and COD 2024 was just an excuse

It probably should not have come as a surprise to anyone – let alone the 35 or so millions of Game Pass subscribers who were hoping that Microsoft would finally make amends for four years of offering a service of diminishing value by… maybe boosting said value at no extra cost? It does not work that way for companies like Microsoft, though. Since it cannot attract more subscribers to Game Pass, Xbox is now treating those 35 million customers as pretty much “locked-in” and highly likely to put up with a price increase. So that is exactly what Microsoft did: based on its announcement about a 2024 Game Pass price hike and general tier changes, just as Ars Technica puts it, the company will soon be asking for more money in order to deliver less content and value to consumers. It is as simple as that.

Funny how that works, though, no? It’s called “bait and switch”, it’s what Netflix successfully pulled off in recent years and it’s exactly what Microsoft is now doing with Game Pass. Both offered a too-good-to-be true content delivery service of low cost and tremendous value, they did so until it reached its saturation point and then they gradually raised said service’s subscription pricing until it does not deliver the same value anymore.

This is happening because, in both cases, the business model these services were based on was practically unsustainable – the main reason behind that being those ever-rising content production costs: no matter how Phil Spencer tried to spin this in the past, not only was Game Pass never profitable, but it actually hurt the company’s bottom line by driving Xbox software sales to the ground. The failure of the mightily impressive Hellblade 2 to even enter the Top 100 of retail game sales in Europe – as it was offered on launch day on Game Pass – is just the most recent of a number of such examples.

It was a strategic choice made in the hopes of Game Pass becoming wildly successful (thus sustainable) long-term. Well, that didn’t happen – it’s not entirely clear if it was even possible in the first place – so it’s consumers that will have to pick up the tab by paying more. Microsoft has now structured Game Pass in such a way that the service’s most important asset, those AAA Day One releases, is unavailable to Xbox gamers unless they upgrade to Game Pass Ultimate (PC gamers are safe for now but few expect that to last). Most of the service’s subscribers are already on Game Pass Ultimate, so Microsoft is basically “encouraging” the rest to either cough up $240 per year or be content with what’s on the current Xbox Game Pass library (and still pay $180 per year for the privilege).

It’s true that the perks of Game Pass Ultimate are many and varied but… let’s be honest here: it’s about these all-important Day One releases (Microsoft Game Studios’ own in particular) first and foremost. Those new games have always been the service’s unique selling point – one that, unsurprisingly, Sony did not match when it restructured its own PlayStation Plus service. It’s even fair to say that those ever-promised “free” AAA releases were the main reason why all those millions of Xbox Game Pass subscribers chose to stick around for four long years, while the Xbox platform as a whole was underperforming due to mismanagement.

It was Microsoft’s promise, though, that things will get better and that AAA first-party Day One releases will be coming that led millions of gamers to make that choice. So the company now practically demanding of all Game Pass customers to become Game Pass Ultimate subscribers (at a higher cost too) in order to gain access to those long-awaited AAA games does not look good. Not good at all.

Drawing parallels with Netflix for one last time: this was bound to happen with Game Pass too at some point or another. Netflix could not go on producing entertainment content at the rate it does in order to retain and expand its customer base without amassing debt (as it originally did), so it enforced a crackdown on password sharing, changed what’s included with each subscription tier and raised prices across the board. The end result: a Netflix subscription that does not deliver great value at any tier anymore, not how it used to anyway.

In the exact same way, Microsoft could not go on producing games costing 50 to 250 million each and then just put them on a cheap Game Pass subscription upon release, so the company raised the prices of each tier and is practically enforcing an upgrade to the most expensive tier on offer. In Spencer’s own words: he needs to run a sustainable business within Microsoft… and Game Pass, in its current form, was getting in the way of that.

In other words, what a lot of people view as a reason for all this – the new Call of Duty being offered on Game Pass as a Day One release – is probably more of a well-timed excuse than anything else. Yes, Microsoft is still going to lose millions of dollars by putting Black Ops 6 on Game Pass. But, as Trusted Reviews puts it, the company will be recovering a part of that cost by charging all Game Pass subscribers more money come September – which is something that Microsoft intended to do at some point anyway.

The company will still be expecting considerable revenue coming from the PlayStation version of Call of Duty: Black Ops 6 and the DLC later released for all versions – while Game Pass subscribers will be essentially subsidizing the title’s release on the service (whether they were planning to play the new Call of Duty or not).

Will any of this actually boost Game Pass subscription numbers in a meaningful way? Will the majority of Game Pass subscribers be OK with the price hikes and tier changes? Will Microsoft still follow the same approach with future Call of Duty titles – or any other AAA Microsoft Game Studios title, come to think of it – if it proves to be disastrous for its bottom line? If the company doesn’t, will Game Pass subscribers revolt as a result?

There’ll be some time before we get to see how all this plays out but, for now, one thing is certain: the hopeful, somewhat innocent days of Game Pass, when Microsoft used to “invest” (i.e. lose) millions of dollars every year in the name of growth or market share or mind share or whatnot, are well and truly over. After the colossal, pricey Activision Blizzard King acquisition everything at Xbox is about revenue – and it’s hard not to feel that, figuratively and quite literally, Xbox gamers will be the ones paying the price.