Xbox Hiked Game Pass 50%, Got Torched, and Is Now Pretending It Was a Learning Experience
Microsoft raised Game Pass Ultimate from $20 to $30 in October 2025. Six months later, new CEO Asha Sharma admitted it was too expensive and rolled it back. This is not a pivot. This is a company getting caught.
In October 2025, Microsoft raised the price of Xbox Game Pass Ultimate by 50%. Overnight. No new tier, no meaningful additional content to justify it. Just $20 to $30 a month, effective immediately for new subscribers, rolling out to existing ones within weeks.
The backlash was immediate enough that Microsoft's cancellation page crashed under the traffic. Forty-five percent of surveyed users said they had no plans to stay subscribed. Forums lit up with people who had spent years defending Xbox publicly saying they were done. I watched this in real time and the speed of it was something. People who had defended Xbox through years of studio closures and broken promises hit a number they couldn't justify and left.
Xbox's response at the time? "Price increases are never fun for anybody." For fuck's sake. That's the line. That's what they went with.
Six months later, new Microsoft Gaming CEO Asha Sharma put the following in an internal memo that promptly leaked: "Game Pass has become too expensive for players, so we need a better value equation."
And on April 21, 2026, Game Pass Ultimate dropped to $22.99 a month. PC Game Pass to $13.99.
This is being framed in various quarters as a bold strategic pivot by a decisive new leader. It is not a pivot. It is a company that made a stupid decision, got punished for it, and is now partially walking it back while hoping nobody does the maths on what they're still charging.
What Actually Happened
Let's establish the timeline cleanly, because the corporate messaging is doing its best to blur it.
Game Pass launched in 2017 at $10-15 a month depending on tier. For years it was genuinely the best deal in gaming. The library grew to over 400 games. Day-one releases for first-party titles made it something you could justify on Xbox exclusives alone. It was well-regarded because it was genuinely good value.
Then the incremental creep started. $17 in 2023. $20 in 2024. Microsoft restructured the tiers at the same time, removing features from cheaper plans. Then in October 2025, the jump to $30, a 50% increase in a single move. At the same time, Microsoft halved the library for the mid-tier plan and quietly removed day-one first-party access for anyone not paying the full $30.
So the value went down at the same moment the price went up. For existing subscribers, that is not a price change. That is a betrayal. You signed up for a service with a specific value proposition and Microsoft removed parts of that value while charging you more for what remained.
The internal justification, as far as anyone could tell from the outside, was that the Activision Blizzard acquisition needed to be paid for somehow, and that putting Call of Duty on Game Pass day-one had cannibalized retail sales badly enough to cost several hundred million dollars in revenue. Both of those things are true. Neither of them is your problem as a subscriber.
The Damage Was Real
Microsoft stopped publishing Game Pass subscriber numbers after reporting 34 million in 2024. They have not published them since. Make of that what you will.
What they did publish: gaming revenue fell 9% to $5.96 billion in the holiday quarter. Xbox content and services came in below internal projections. The CFO disclosed an unspecified impairment charge against the gaming business. These are not the numbers of a price increase that was working.
The Call of Duty data is particularly brutal. Black Ops 6 launched day-one on Game Pass in 2024 and Microsoft called it the biggest Call of Duty launch ever in terms of players. What they did not lead with: physical and digital retail sales dropped sharply compared to the previous year. PlayStation owners bought 82% of the dollar volume of Black Ops 6 in October 2024. Xbox hardware barely moved.
Black Ops 7, the next entry, posted the franchise's worst year-end sales ranking since 2008. The series that Microsoft paid $68.7 billion to acquire, fought a years-long regulatory battle to control, and put on Game Pass as its flagship value proposition generated its worst commercial performance in nearly two decades.
The $30 price point made none of this better. The only thing it did was accelerate the departure of subscribers who had already been watching the value proposition deteriorate for years and finally had a number they couldn't justify.
The "Mistake" and What It Actually Means
Phil Spencer, who spent years building Game Pass into what it was, publicly defended the $30 price in October 2025. "Price increases are never fun for anybody" is a sentence that should follow you around for a while. It contains no acknowledgement that the increase was too large, that the value had been simultaneously reduced, or that the people cancelling had a point. I have played games on Xbox since the original. I've defended the platform in arguments I should have won more selectively. The $30 price was genuinely indefensible and the defence they offered was insulting bullshit.
Spencer retired in February 2026. Asha Sharma, who comes from Microsoft's CoreAI division with previous roles at Meta and Instacart, took over as Microsoft Gaming CEO. She had never worked in games before. The industry was sceptical.
Her first significant action was the leaked memo saying Game Pass had become too expensive. Her second was the actual price cut. Credit where it's due: two months in, she had diagnosed the problem correctly and acted on it. That is genuinely more decisive than the leadership that created the problem in the first place.
But here is the thing. The price cut from $29.99 to $22.99 is not a reversal of the October 2025 hike. The October 2025 hike was from $19.99 to $29.99. Game Pass Ultimate is still $3 a month more expensive than it was before the hike that everyone agrees was a mistake. And the day-one Call of Duty access that was supposedly justifying the $30 price? Gone. Future Call of Duty titles will not launch on Game Pass. They'll arrive around a year after retail release.
So the subscription is more expensive than it was 18 months ago, with less content than it had when the price went up. The partial rollback is being reported as a win. It is a partial win. The question nobody is pressing hard enough is why the rollback stops at $22.99 rather than going back to $19.99.
The Catch Nobody Is Talking About Enough
The Call of Duty removal is a bigger deal than the coverage has treated it.
Microsoft spent $68.7 billion on Activision Blizzard. The regulatory argument Microsoft made, repeatedly, to competition authorities in multiple jurisdictions, was that acquiring Call of Duty would benefit consumers by bringing the franchise to Game Pass. This was the central commercial justification for one of the most expensive acquisitions in the history of the entertainment industry.
Less than three years after the acquisition closed, Call of Duty is no longer launching on Game Pass day-one.
This is not incidental. Call of Duty's retail sales collapsed when it went on Game Pass. Black Ops 7 was the worst-performing entry in nearly 20 years. The cannibalisation that Microsoft's own internal documents had modelled and acknowledged was real, and it was expensive. Pulling CoD from day-one is an admission that the entire strategic rationale for the Game Pass value proposition as a driver of the Activision acquisition did not work as advertised.
Existing Call of Duty games stay in the library. Black Ops 6 and Black Ops 7 aren't going anywhere. But the next entry, Modern Warfare 4 or whatever they call it, will be a $70 purchase for Game Pass subscribers at launch, arriving on the service around a year later. The thing you were paying $30 a month for has been removed and the price has only come down to $23.
That is the deal. It is better than $30. It is not as good as the pre-hike service at $20.
Where Xbox Actually Is
The Game Pass reversal is happening against a backdrop that is not great for Xbox regardless of subscription pricing. Series X and S sold roughly 2 million units in 2025, down 45% year on year. November 2025 was the worst month for US gaming hardware unit sales since 1995 and Xbox led the decline. Xbox holds approximately 23% global console market share against PlayStation's 45% and Nintendo's 27%.
The next-gen Project Helix console is reportedly a hybrid that plays Steam games and basically merges Xbox with Windows. It is targeted for 2027. The current Series X and S generation has no meaningful exclusive games on the horizon that are not also releasing on PlayStation and PC.
This is not a temporary dip. The console war is over and Xbox lost. What Microsoft is becoming is something like a multi-platform publisher with a subscription service attached. Six of the top ten best-selling PS5 games in Q2 2025 were Microsoft titles. Forza Horizon 5 on PS5 apparently cleared $300 million. Indiana Jones debuted at number one on PlayStation. Halo is going day-and-date on PS5 in 2026.
Game Pass at $22.99 is a better product than Game Pass at $29.99 with less content. But a better product than a mistake is not the same as a good product at a fair price. The question is whether $22.99 for a library without day-one Call of Duty and on a platform that is actively moving its exclusive software to competitors is actually where Game Pass needs to be priced to grow again.
Sharma says she is thinking about Game Pass in two steps. Affordability first. Then evolving it into a more flexible system. The second step is the interesting one. More tiers, lower entry points, ad-supported options. The Netflix model.. Whether that will arrest the decline is genuinely unclear. The damage from six months at $30 is not reversed by one announcement.
The Part That Should Bother You Most
Microsoft knew this would happen.
Internal documents from the 2023 regulatory review of the Activision acquisition included modelling that acknowledged Game Pass causes cannibalisation of digital sales. They modelled it. They documented it. They acquired the company anyway and put Call of Duty on Game Pass anyway and raised the price anyway.
Phil Spencer told an interviewer in 2021 that anyone calling Game Pass a burn-cash-now, raise-prices-later strategy was wrong. Three price hikes later, including a 50% jump that lasted six months, and a partial rollback with the flagship content removed. Read that out loud.
The people who cancelled when the price went to $30 were not overreacting. They were reading the value proposition correctly. A service that had been incrementally degraded for two years and then hit with a 50% price increase had stopped being the best deal in gaming and started being an expensive subscription to a library that could change at any time.
Asha Sharma's price cut is a step in the right direction. It does not undo the churned subscribers, the destroyed Call of Duty retail sales, the $5.96 billion holiday quarter miss, or the years of trust that eroded while Microsoft was telling everyone the value was there.
The lesson here is not that Microsoft listened and corrected. The lesson is that Microsoft raised the price of its best product by 50% with degraded content, crashed its own cancellation page under the unsubscribe traffic, lost its biggest franchise's retail momentum, and then partially walked it back while framing it as a strategic evolution.
Game Pass is $22.99 now. It was $19.99 eighteen months ago. The difference is smaller content, a CEO who had to admit in a leaked memo that it had become too expensive, and Call of Duty moving to a year-delayed access model that nobody asked for.
Call it what it is.
Xbox Game Pass is $22.99/month Ultimate, $13.99/month PC. Better than it was. Not as good as it was before they broke it. Xbox Game Pass | Original Xbox Wire price cut announcement