I have seen some aggressive pricing moves in my time, but this is sort of the inverse of what we usually see. I’m still trying to parse out just how brazen this new move from Microsoft is as they attempt to effectively force all active Xbox players to get Xbox Game Pass instead of merely coasting along with Xbox Live Gold only, which is required for most online play.
Usually when we see pricing moves in the game industry, it’s one company trying to undercut another. But in the “service” space, we have only seen those prices go up. Many hoped that Xbox Live would follow PSN and become free in future iterations. Instead it was Sony that followed Microsoft, charging for PS Plus, and even Nintendo eventually came along too, charging (a paltry sum, admittedly) for its online service.
But Microsoft is now escalating things to a new level. They have been very clear about how they do not care about winning the actual console box sales war, and they have stopped reporting exact Xbox sales for years now. But they have not stopped boasting about Xbox Game Pass adoption, which increased more than 50% over the course of the pandemic, and it’s clear that they want to heavily rely on that service as the main backbone of their gaming arm going forward, whether you’re playing on an Xbox Series X, an older Xbox One, a PC, or streaming through xCloud.
This latest move has upped the price of Xbox Live Gold to $120 a year in total, just shy of the $150 a year it costs for Ultimate, which includes both Gold and access to the entire Xbox Game Pass library. The massive price hike is effectively Microsoft just flat-out bullying players into getting Game Pass if they haven’t yet, as there now barely feels like an alternative. You can not subscribe to the online service, but that means you cannot play any games online, which in 2021, is quite a limited selection indeed, even for many single player games. Or you can just pay a bit more, $30 a year, to get access to this enormous bounty of Xbox Game Pass games.
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To me this feels like leasing a Toyota Camry and then hearing that you can either double your payments to keep the exact same car, or pay just a bit more to upgrade to a Lexus ES 350F Sport. It doesn’t really even feel like a choice at all.
The goal, no doubt, is to someday sunset Xbox Live Gold completely and just have one uber-service that everyone is paying for. This is a transitional step in that direction. But while Game Pass has always been a boon to Microsoft, this does sort of give Sony a temporary advantage, as PS Plus prices have not increased (yet) and so that online service is the cheaper option. Sony has PS Now, yes, but it’s still not really even close to the same level as Xbox Game Pass, as Sony just will not commit to making Microsoft-like moves such as putting all its first party games in such a subscription, as frankly, they just sell way too many copies on their own for that to make much sense. So with this move, I suppose the gap between these two console families gets wider, and the spacing this time around isn’t so much about power, but services.
It’s a bold move and I am wondering how consumers, and the market in general, will respond to it. In some ways it feels like Microsoft being a bully and overconfident in Game Pass. In others, this does sort of feel somewhat inevitable, and has for a while now.