Microsoft’s Cash Grab

Yesterday, Microsoft made the announcement regarding price hikes for their Game Pass Service. The top-tier Ultimate Service will now cost $30 USD per month ($360 USD per year). While there are some enhanced “perks” that are being offered with this cost increase, it may still be a tough pill to swallow for many households. Running down the list of changes will be required to determine whether this offering still makes sense from an overall value perspective.

1. Total number of game titles which will be accessible is being increased to 400. Products will span the libraries of the newly-enshittified EA alongside product from Ubisoft which you shouldn’t expect to own.
2. 50% more Day One releases will be offered through the service. Improving the quantity of new releases through the service will allow gamers to make a better decision on which titles they may ultimately purchase.
3. Ubisoft Plus Classics availability – See Point 1 on Ubisoft’s view of its customers.
4. Fortnite Crew – Battle Pass + 1,000 vBucks per month beginning November 18th. This provides a similar cost avoidance element which follows the bundling of services in other subscriptions. Examples would include “free” Peacock with an Instacart subscription or “free” Peacock or Paramount+ with a Walmart+ subscription. Spending money on Service A nets you perks for Service B.
5. 1440p Resolution Cloud Gaming with better streaming quality – this will be a subjective perk that depends on how one consumes their games.
6. New store point rewards cap of $100/year – If you’re the type of gamer that can max out this perk, feel free to subtract this value from the annual subscription cost.

This isn’t the first price hike for the service, nor will it be the last. The problem with the cash grab is compounded by what it will now cost to obtain a console for those not already in the ecosystem. XBox Series X models weren’t flying off the shelf two years ago when they were being discounted. With an entry point between $599 USD and $799 USD, which is dependent on storage and console finish, the expectation of customers shelling out another $360 USD per year in a market where other prices have spiked equivalently may not yield the desired result which would please Microsoft and its shareholders. Although their gaming revenue is dwarfed by cloud revenue and licensing for enterprise products and services, the fact that rather sizable layoffs in the gaming division didn’t do enough to moderate costs reinforces that Microsoft’s current strategy in this space is untenable.

In a nod to Idiocracy, it has also been rumored that an ad-supported tier of Game Pass will come to fruition. Whether this will involve sitting through Youtube-style ads (and potential gameplay disruptions), in-game product placement (e.g., billboards for Carls Jr, unskinned models for consumables that can be mapped to a given vendor who pays Microsoft enough money), or some other to-be-tested model is unclear. These ads will not replace existing secondary revenue streams such as skins or cosmetics.