Xbox announced a remarkable 50% price increase to Game Pass this week, underlining an accusation it’s so frequently rebuffed – that the service is simply not sustainable.
Xbox Lost Over $300M Releasing Call of Duty on Game Pass
Now a report from Bloomberg, citing former employees who asked not to be identified, reveals that the Redmond firm lost over $300 million releasing last year’s Call of Duty: Black Ops 6 directly into the subscription.
The expense has been calculated based on expected lost sales across Xbox consoles and PC, where the game was available to download day one as part of Microsoft’s service.
In the US, PlayStation platforms accounted for an outrageous 82% of all full-price launch month sales.
Offsetting that, overall US video game subscription spend increased just 16% year-over-year during the month of Black Ops 6’s launch.
Analyst firm Aldora’s founder Joost Van Dreunen observed:
“Game Pass hasn’t delivered the explosive growth Microsoft anticipated post-Activision, and they’ve realised their infrastructure costs don’t align with their pricing model.”
As reported earlier this week, Game Pass Ultimate – the only tier of Microsoft’s subscription which still includes day one games on console – will now cost $29.99 per month. While it offers a different slate of perks, Sony’s highest priced subscription PS Plus Premium costs just $17.99 per month.
PlayStation, to its credit, repeatedly said that giving away full-price first-party games as part of a subscription was simply not sustainable. It was criticised at times for making the comments, but its perspective has since been proven sound.
Microsoft hasn’t provided an update on the total number of Game Pass subscribers since 2024, when it revealed it had 34 million active subscribers. It’s worth noting that it rebranded Xbox Live as Game Pass to give the service a significant shot in the arm.
Despite all of this, speaking at the Tokyo Game Show prior to this week’s price increases, Xbox’s Sarah Bond insisted yet again that the service is profitable, although would only quote its $5 billion revenue to support her claim.
There’s been increased pressure from the upper-echelons of Microsoft since its unprecedented near-$70 billion acquisition of Activision Blizzard to improve the Xbox division’s profitability, and we’re slowly starting to see the realities of that bite.
