The Game Pass Price Increase Is Here, And The Same Week MS Advertises "You Don’t Need An Xbox To Play Xbox"

The Long-Awaited Game Pass Tier Consolidation And Price Increase Has Finally Arrived!

Goddamit. I said I would take a break from blogging about Xbox and Microsoft's gaming ambitions, and yet, here I am, writing about the recent news this week about Xbox and its video game divisions. In my defense, we have some significant news items to talk about today. The first stems from Microsoft retooling its Game Pass tiers, including the not-insignificant price increase on PC Game Pass and Game Pass Ultimate. The other notable point of contention is how Microsoft has taken its recent partnership with Amazon, in which Xbox Cloud Gaming is playable on Fire TV, and running with it in the form of a new national advertising campaign that signals to some a complete lack of investment and care in moving their hardware. On top of that, we have console hardware sales that paint a mixed future for all future video game hardware, but with a few insights on what Microsoft and others might be thinking about for their next moves for a new batch of consoles.

However, let's jump into the news that most people are discussing related to Xbox: the Game Pass tier consolidation and price increases. Before I review the details, let's not joke ourselves. We knew these changes were coming, and everyone, including your grandmother, knew that some form of a price increase on Game Pass Ultimate was all but assured before the end of the year. Most of the tier and price changes are not genuinely surprising and are, instead, items we have heard about in some capacity on the rumor mill. But what are the changes? First, all Game Pass Tiers are jumping up in price. For the United States, for example, Game Pass Ultimate is increasing in cost from $16.99 to $19.99. In Canada, the price increase for Ultimate is by four Canadian dollars; the UK is seeing a two-pound jump; Eurozone countries generally see a three-euro price increase. PC Game Pass is seeing a two $/£/€ increase, and Game Pass Core, formerly Xbox Live Gold, is only seeing a price jump if you buy the service annually, from $59.99 to $74.99. Its monthly cost is still pegged at $9.99 for the US, and it maintains its regular monthly subscription price worldwide. All of these price increases are effective starting September.

Now, you might be asking about the cost of Xbox Game Pass or Console Game Pass, considering I detailed the price increase for Game Pass Ultimate and PC Game Pass. Well, Console Game Pass is on its way out. Starting sometime in September 2024, Console Game Pass will no longer be available for new subscribers. Instead, new Xbox Series X/S owners will be prompted to subscribe to "Game Pass Standard," which starts at $14.99 monthly, a notable jump from the old Console Game Pass monthly fee of $10.99 per month. Worse, Game Pass Standard will NOT feature day-one game releases moving forward. For new Xbox Series X/S owners to be able to play hotly anticipated titles like Doom: The Dark Ages, Indiana Jones and the Great Circle, or Perfect Dark at launch, your only option is Game Pass Ultimate, which in most countries is simply two units of currency more. In summary, the Console Game Pass tier is being renamed, will become more expensive, and lose a key selling point. Now, if you already have a Console Game Pass subscription for your Xbox Series console, you're safe and will even continue getting day-one game releases on Game Pass. However, as reported by Windows Central, starting on September 12, 2024, you can only re-up your Game Pass for Console subscription for up to 13 months, meaning you will have to remain vigilant to keep your subscription active, or else Microsoft will likely opt you into Game Pass Standard or Core should you lapse. The days of buying Game Pass redemption cards on sale and having the service at a discount for years are dead.

We often joke that Game Pass seems to be Xbox's "future," and it appears that there needs to be a slight addendum to that. Game Pass Ultimate is the future. To Microsoft's defense, current users aren't losing features, and the price increases are generally below what some feared (i.e., as high as $5). Likewise, when Game Pass first debuted, everyone in the gaming hobby joked about being able to re-up subscriptions to the sky at a massive discount and that even the non-discounted price was too low for what you got. Correspondingly, all of the tiers of Game Pass that you care about still have backward compatibility support, and there's no denying that Microsoft is taking note of every other streaming subscription service that raised prices this year. But, still, all of this news sucks. Creating a new "Standard" tier that does not have day-one game releases is a slight red flag that Microsoft is starting to realize that maybe streaming and AAA game development do not go hand-in-hand. Previously, with AAA games like Starfield or Call of Duty, Microsoft created specific pathways and one-off additions to your Game Pass subscription to play them on day one or early access without gutting Console Game Pass entirely. Likewise, I'm still shocked Microsoft hasn't bit the bullet on their long-rumored ad-driven "free tier" of Game Pass. Its ad-driven tier has been a massive boon for Netflix's revenue and has been credited with reversing previous predictions that Netflix would experience a subscriber contraction.

If I am being entirely generous to Microsoft, their new business decision here might be their attempt to bring more third parties that are skeptical of Game Pass back to the negotiation table. If Microsoft pushes people to a more expensive tier for day-one game releases while allowing developers more freedom to limit the pool of Game Pass subscribers who can get their more significant projects, you could get studios like Capcom back. Now, that's IF Microsoft is using its Game Pass price increases to provide moderate to AA third-party game studios a more substantial "cut" of its pool of Game Pass money. EA, Sega, Ubisoft, and Take-Two are already on board, and indies generally rely on contracts and the "pitching" process to get their ideas off the runway. Nonetheless, it is hard not to remain pessimistic about that being glass-half-full thinking. When Netflix cracked down on password sharing and terminated its most affordable ad-free tier, we didn't suddenly see a glut of new programming on Netflix. Instead, Netflix pocketed that additional cash and boasted that they were one of the few streaming platforms that didn't lose subscribers last fiscal year.

Microsoft's Commitment To Their Amazon Partnership Has Caught Many Off-Guard. It Should Not Have.

Who would have thought that Microsoft would go all-in with its new partnership with Amazon? Or did it? For those unaware, Xbox Cloud Gaming was announced for Amazon Fire TV devices earlier last week. To clarify, Xbox Cloud Gaming is NOT Game Pass, but it still offers a deluge of video games on mobile devices, Smart TVs, and Amazon Fire Sticks if you have a Game Pass Ultimate subscription. Days before unveiling its new plan for Game Pass, Microsoft debuted a new advertising campaign to get owners of compatible Fire Stick devices to sign up for Game Pass Ultimate and use their TV streaming device to play Xbox games. The ad was a playful parody of the starting scene from the first Scream movie, which is a reference I don't know holds a ton of cache these days, and is as follows:

Now, only the 4K Fire Sticks are compatible, and that makes sense considering the system requirements for most games playable on Xbox Cloud Gaming. However, Prime Day is right around the corner, and Amazon has already discounted most of their Xbox-compatible streaming sticks to as low as $24.99. Even if you decide to give things a shot after Prime Day ends, a Fire TV Stick 4K Max retails for just $59.99. That's considerably less money than any video game console on the market. It's worth noting that on Amazon's end, they are and are not matching Microsoft's excitement for this push to get people to use Xbox Cloud Gaming on their 4K Fire Sticks. One reason for Amazon's hesitation is that they already have their own game streaming service, Amazon Luna. When you search any of the Fire streaming devices that are Xbox Compatible on Amazon.com, while you do see mentions of third-party applications like Netflix, Max, and Hulu+, there's no mention of Xbox Cloud Gaming. Instead, the Amazon storefront steers you towards Luna. It also bears repeating that Xbox's cloud gaming service is locked behind Game Pass Ultimate and has already been made available on Meta Quest headsets and Samsung Smart TVs.

And to those Xbox console purists who view Microsoft's decision to push cloud gaming on Amazon Fire devices as a "betrayal," I have some good news for your intolerable fanboyish. Early reviews signal that the latency on Fire Sticks is worse than it was on Samsung's Smart TVs. And even with those Smart TVs, most people came to view Xbox Cloud Gaming on those devices as less of a replacement for a game console and more of an additional part of a streaming ecosystem in a household with multiple televisions. However, hearing from a DigitalTrends editor that they found playing Doom (2016) on a Fire Stick to be a generally painful experience with "plenty of noise," it seems clear that none of this remains a replacement for console or PC hardware. Hell, that very editor noted that they couldn't even play Celeste without a bit of latency, resulting in them having to modify how they timed their jumps. For most of you, myself included, that's a non-starter. What we have here is another example of Microsoft casting a wide net and continuing with its plans to get as many people to become normalized with Game Pass and its services as it readies a new batch of consoles, with one possibly being a dockable handheld-like device. And Amazon signed off on it because they get another valuable perk, while Google and Apple refuse to play ball with their devices. Will this pay off? Only time will tell.

More importantly, to the right consumer, the prospect of playing a batch of Xbox games for as little as $60 for a device and $17 per month to get the streaming service side of things settled sounds like a deal. The problem is that it feels like a dated stopgap to most people who are in the gaming hobby. Before the advent of the Steam Deck, playing AAA games on your smartphone or streaming stick seemed like a boon for anyone who could figure out how to make it happen. Today, the idea of paying more than $15 for a mobile game, regardless of whether it is a quality title or not, seems untenable. Why opt into a singular application on a smartphone when there's something like a Steam Deck whose digital library is hardcoded to something tangible? Furthermore, last week, Xbox saw a nearly seven-hour-long outage that essentially rendered all its streaming devices and platforms inert. That's why I think there's more to this than Microsoft knowing its console hardware situation isn't improving. Microsoft is looking for a broader adoption of Game Pass and for it to become as normalized as Netflix, Hulu+, and Disney+ as it readies itself for devices that rely entirely on Game Pass to do gaming. And that includes hardware that doesn't come from Microsoft.

The Hardware Picture Doesn't Look Great For Xbox, But That Depends On How You Look At It

Mat Piscatella of Circana (formerly The NPD Group) has become a de facto force in reporting on console hardware sales now that practically no one in the industry shares their hardware sales with the public. This week, they relayed how the PS5 is still leading monthly hardware sales, with Nintendo at second in terms of units but Microsoft at second when you adjust for dollars. Overall hardware spending in May was down by 40% as the PS5 and Xbox Series consoles reached the 43-week mark. When taking notice of the latter point, the consoles compared remarkably differently to their predecessors. The PS5 exceeds the PS4 by 8% in sales, whereas the Xbox Series X/S is trailing the Xbox One by 13%. Regarding games, Microsoft will likely continue to view its multiplatform strategy as a success as Call of Duty: Modern Warfare III (2023) remained the best-selling "premium game" on PS5, with Sea of Thieves at the #3 spot. On Xbox, the list was largely the same, but Piscatella made a special note about Senua's Saga: Hellblade II. It ranked 37th on the May Xbox engagement chart, and when adjusted to include Game Pass, it bumped up to 12th. So, Game Pass is important to specific mid-tier first and third-party game releases. Still, putting your title on Game Pass will not represent this massive change of fortunes, especially for single-player campaign-focused games.

Suppose there's something positive to be said about these numbers. In that case, we genuinely don't talk enough about the Xbox One managing one of the most significant turnarounds in the gaming industry short of Final Fantasy XIV. The console went from persona non grata to regaining much of its lost ground and carving out major non-North American niches where it was the number two console. Nonetheless, the facts remain clear: Microsoft's endgame is making money on individuals on Xbox and Game Pass. The barometer for a sustainable business is not tied to moving hardware and, instead, is more oriented toward a profit-per-consumer model. When judged by that metric, Microsoft is already doing well. This direction is also not new to Microsoft. Microsoft has, culturally as a company, ceased putting value in market share for decades. Take, for example, its Surface division. While everyone has seen a Surface tablet or laptop, they might be surprised that even among tablets, the Surface division has long been hovering at 2% to 5% of the market. Likely, they see declining worldwide console hardware sales as a need to reimagine things to match what they are doing with the rest of their computer hardware divisions rather than make a daring push like some want them to. Sure, you can blame this decline in console hardware on people knowing that we are reaching the end of what most would call the "ninth generation." However, grouping consoles into generations remains increasingly tenuous at this point. What would we consider the "start" of the next generation of consoles?

The question then becomes, was everything leading up to this point necessary? Did Microsoft have to spend billions on Activision-Blizzard and then billions more to fight to keep that purchase on the table? Did they have to sign dozens of deals to get mid-tier developers into their gaming division, only to shutter studios like FASA, Lionhead, Tango, and Arkane Austin? Did they have to gut completely having console exclusives to their gaming hardware? Was there a better way to get to this point where you're still in third place between the "big three" while continuing to be a stable profit-making enterprise? Plenty of essayists and video bloggers have been out there drawing comparisons between where Xbox and Microsoft stand right now and Sega leading up to the launch of the Dreamcast. That comparison is complete histrionics. Game Pass and Call of Duty alone represent more than anything Sega had past the Genesis, and they will continue to exist for decades. The point for debate is how much of a fixture hardware will be in those coming years. It will not be 0%, and Microsoft already has shown with its Surface division that it can be content with having a hardware market share that is in the single digits. So, which future is the big green house lurching towards?