Microsoft’s game subscription service, Xbox Game Pass, is facing significant pressure to maintain its sustainability. Following this week’s shocking 50% price hike, former employees speaking to Bloomberg revealed that a major game added to the service last year has cost the company a significant amount.
Xbox Suffers $300 Million Black Ops 6 Billion
According to Bloomberg, the Redmond-based company lost more than $300 million by offering Call of Duty: Black Ops 6 directly to Game Pass subscriptions. This massive loss was calculated based on the expected full-price sales losses due to the game being available for download on Xbox and PC as part of Game Pass on day one.
The data demonstrates the risk of Microsoft’s strategy:
- During Black Ops 6’s launch month, 82% of full-price sales in the US came from rival platform PlayStation. In the month of the game’s release, video game subscription spending in the US grew by only 16%, suggesting that Game Pass has failed to achieve the significant momentum expected.
- Microsoft drew attention this week by raising the price of Game Pass Ultimate, the only subscription tier that includes games on consoles from day one, to $29.99 per month. This increase has renewed accusations that the service is struggling to cover its costs. Sony’s most expensive subscription, PS Plus Premium, costs just $17.99 per month.
PlayStation has repeatedly stated that offering its own first-party games at full price on its day-one subscription service is unsustainable. While this stance has been criticized, recent developments have proven Sony’s perspective correct.
Just before the Game Pass price hikes, Xbox CEO Sarah Bond claimed the service was profitable, but she offered only a $5 billion revenue figure to support this claim, without providing detailed profitability data. Microsoft hasn’t updated its total Game Pass subscriber count since last announcing 34 million active subscribers in 2024.
Following Microsoft’s $70 billion acquisition of Activision Blizzard, pressure from the company’s top management to increase the profitability of its Xbox division is mounting. The costly operations of Game Pass and the losses incurred by the addition of big-budget games to the service are being interpreted as tangible results of this pressure.
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