So Microsoft came out the other day and said that the price for Xbox Live Gold is going to basically double, from 59.99 USD to 119.99 USD for a yearly subscription. They then, almost immediately rolled it all back and threw up the old JK hands.
I feel like this is a really interesting slip up from Microsoft. It’s not that the world is in a pandemic. That times and money are tough for some. It’s not that people are playing video games more now than ever to relieve their stress and get through their hard times. It’s not that Microsoft has suddenly added an unbelievable amount of value to warrant the increase in price. It’s that they played their hand at the wrong time and had to walk it back.
Microsoft, as a corporation, has increasingly moved towards the subscription model of business. You no longer really even have to pay for Windows 10 anymore, but you do need to pay a subscription fee for Microsoft Office. They want that steady trickle of money coming in and Xbox Live Gold memberships are a fantastic way of getting that. You want to play a selection of their games in their ecosystem, how about you get a Game Pass and pay some more on a monthly basis? Hell, you can even pay for a new system in monthly installments. There is nothing wrong with any of this, it’s their business and they can price their services anyway they like, I’m not knocking them for that.
It’s just so fascinating to see what their plan for this service was. They wanted to be making 120 USD a year for the privilege to play their console online, along with discounts on games, monthly free games, and the other little benefits.
I’m not really that deep in all the Microsoft Services so I’m going to try my best to parse it all out here.
Xbox Live Gold – 60/year – – increase to 120/year
Xbox Game pass Ultimate – 15/month
Xbox Game Pass Console – 10/month
Xbox Game Pass PC – 10/month
The console and PC Game Pass don’t include gold, but the Ultimate one includes both PC, Console, and Gold membership, along with EA Play.
So basically, all they were trying to do with this price increase is to get their customers who are just doing the basic Xbox Live Gold service upgrade to the Ultimate Game Pass. You bring their monthly cost from 5 to 10 USD for the year. Show them the value they are missing out on by not just spending another 5 USD a month to upgrade to the Ultimate service. Perhaps once the price increase is in place, have a little discount period where you snake them all over to Ultimate for 12 a month or something. Get them all hooked and then slowly increase the price and value proposition of their primary service, à la Netflix.
The real question now is when do they attempt to raise the price again? Do you think they even do it, or do they change their services around by renaming them and kind of tricking people into the Ultimate tier?
My guess is that if they do try to increase the price of Gold, or make some structure shift to get people to pay substantially more for their service. It would most likely happen when the Bethesda games start rolling out. Once something like Starfield is put out that would get them way more leverage. They can’t do it with Halo since everyone has lost faith in that product, so even if it is good it will just be making up for all the years they dragged us Halo fans through the dirt.
It’s an interesting and slightly sucky situation to be in. Knowing that this price change is potentially hanging over our future. I know I’m not big on playing Microsoft consoles because the exclusive games are lacking, but I am highly interested in the Ultimate PC subscription and playing any of those exclusive on my PC. A price hike on PC Game Pass would impact if I’m purchasing a game or just getting the Game Pass so I could rent access to them.