5 Reasons Xbox Game Pass Will Get More Expensive Over Time
Xbox Game Pass has remained one of the best deals you’ll find in gaming since its release, but with Microsoft inching up how much the service will cost you per month, you may find yourself double-guessing the service.
And with Microsoft and Xbox hinting at further issues down the line, you shouldn’t be surprised if the price of Xbox Game Pass continues to incrementally rise over time. But why exactly is this? Here are some key reasons to explain the rising costs of Xbox Game Pass.
1. Microsoft Is Focused on Acquisitions
A surprising reason the cost of Xbox Game Pass has increased and is likely to continue to increase is the acquisition of Activision Blizzard and how legal troubles have affected Xbox.
Microsoft garnered the attention of regulators like the FTC and CMA when attempting to buy Activision Blizzard for $69 billion after already purchasing Bethesda for $7.5 billion. In response, the CMA and FTC blocked the acquisition of Activision Blizzard, sparking legal debate and court rulings.
Curiously, there was a key piece of information regarding Xbox Game Pass that stemmed from these court rulings. Specifically, Xbox claimed that even with the intended acquisitions, it would not increase Xbox Game Pass pricing, as reported byTweakTown.
Despite this claim, Xbox still went and hiked prices in June 2023, just as the acquisition of Activision Blizzard should’ve been finalized. So while Xbox stuck to its word, it is also highly convenient that Game Pass prices increased right before the $69 billion deal was supposed to pass.
And with the Activision Blizzard deal prolonged and blocked by regulators, the financial woes and pressure on Xbox will only increase.
Considering this, you may already see the June increase in Game Pass pricing as a direct response to the anticipated costs of acquiring Activision Blizzard. And, with the deal tied up in legal battles and court hearings, the acquisition’s chances of further altering Xbox Game Pass and how much you pay for it will grow more likely.
2. Modern Games Are Riddled With Development Costs
Aside from the direct dealings of Microsoft, another reason you can expect price increases for Xbox Game Pass is the rising costs of game development throughout the industry.
With rumors that Xbox staples, like Halo Infinite, cost over $200 million to develop and Final Fantasy XVI developers stating a numbered Final Fantasy game could cost “upwards of $100 million” in an interview withGame Informer, video game production costs are skyrocketing.
Even compared with the monumental release of Halo 3 for the Xbox 360, development costs were a mere $60 million in comparison. But you may be wondering how this trend affects Xbox Game Pass.
Games with such high costs need as many players as possible. And with Xbox pushing Xbox Game Pass just as much as its first-person exclusives, there is enormous pressure on the service to make games profitable. Rising costs may lead to more expensive game development and even more expensive game licensing.
And, because of the emphasis Xbox places on Xbox Game Pass, it’s almost inevitable that the service will face higher licensing fees and more pressure from developers to ensure it’s profitable. According toGamespot, Microsoft has already paid “hundreds of millions of dollars” to developers in Game Pass license fees.
So whilethe effects of rising development costs on gamingput pressure on the industry as a whole, when it comes to Xbox Game Pass, you could see an increase in monthly subscription costs to accommodate a more expensive industry.
3. Xbox Game Pass Restricts Game Sales
Continuing with how rising costs may push Xbox Game Pass pricing even further up, another aspect of Xbox Game Pass that exacerbates this issue is how profitable it is.
You may have seen countless internet rumors debating the success of Xbox Game Pass. These rumors stem from Microsoft making a loss on the service to it being the most profitable gaming service of all time, depending on who you talk to. But with the CMA investigation into Microsoft, more facts have come to light.
To be more specific,GamesIndustry.bizreported that the CMA found that Xbox Game Pass resulted in a “decline in base game sales” 12 months after being added to the service. When you take this fact with the prior point of the industry growing to require gigantic costs, the issue gets a lot bigger.
Not only are games more expensive to make but if Xbox releases or launches a title on Xbox Game Pass, it’s faced with reduced sales. In terms of profitability, this creates a double-edged sword for developers and Xbox.
When youcompare Xbox Game Pass to PlayStation Plus, there is a clear difference in approach. PlayStation makes its subscription service far less intrinsic to the platform as a whole.
But with Xbox keeping Game Pass so tightly wound to its identity and games, you may find monthly costs slowly rising over time to account for a lack of game sales and rising costs.
4. Xbox Has to Match the Pricing of Its Competitors
In terms of the increase in Xbox Game Pass pricing in June 2023, you could see the increase as nothing more than an attempt to match the pricing of competitors.
After announcing the price increase, Xbox stated that it “adjusted the prices to reflect the competitive conditions in each market,” as highlighted byThe Verge. And to be fair to Microsoft, console pricing has done exactly that, with the Xbox Series X rising to meet the costs of the PlayStation 5 in most markets.
If you look at the price increases for Xbox Game Pass, however, the pricing seems less competitive. Xbox Game Pass Ultimate, for instance, was increased from $14.99 a month to $16.99, but the cost of PlayStation Plus Extra is $14.99.
Granted, PlayStation Plus also has a Premium tier that costs $17.99 a month, but if you look atthe details of every PlayStation Plus tier, Game Pass Ultimate has always been closer in price to PlayStation Plus Extra. You could see the increases for Game Pass as more of a trend to match the highest tier costs of PlayStation Plus.
But even if Xbox did increase pricing to match competitors, the fact it matched the highest possible price ranges doesn’t bode well for Xbox Game Pass. And with some of the prior points taken into account, Xbox will likely need to continue to increase pricing, especially if competitors like PlayStation do the same.
5. Xbox Game Pass Will Hit a Subscriber Plateau
One of the biggest reasons you’ll likely see the cost of Xbox Game Pass continuing to increase is because of the population limit of the service. For instance, there are only so many Xbox users out there, and what happens when all of them already use Xbox Game Pass?
For a service that relies on subscriber count for enough monthly payments to make the service profitable, the prospect of running out of new subscribers is potentially devastating for Xbox Game Pass.
Speaking at the WSJ Tech Live conference,The Vergeeven reports the Head of Xbox, Phil Spencer, addressing this issue. Specifically, Spencer admitted that eventually Game Pass will have “reached everybody on console that wants to subscribe” and that he’s seen the growth of the service on console “slow down”.
As a result, Spencer even candidly spoke about how Xbox will have to “raise some prices on certain things”. But in turn, he also pointed out that PC Game Pass is nowhere near slowing down. While this is good in the short term, PC Game Pass will inevitably face the same problem.
And once PC Game Pass also hits a population plateau, the growing subscriber counts and associated profits of Xbox Game Pass will also. As a customer of Xbox Game Pass then, It’s almost a certainty that, like any subscription service, you will eventually see further price increases as Microsoft looks to maintain profitability.
The Future of Xbox Game Pass Is Full of Challenges
Whether through rising industry costs, pressure from acquisitions, or even becoming a victim of its user base, Xbox Game Pass has many obstacles to overcome, and most of them involve a price adjustment in some way or form.
And while there are many great benefits to Xbox Game Pass as a service, you’ll likely have to readjust your view of Game Pass as time goes on. After all, the service will only continue to shift and change along with Xbox and the industry.
Are you an avid Xbox or PC gamer? Then check out the reasons why you should get an Xbox Game Pass subscription right now.
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