Xbox CEO admits Game Pass is ‘too expensive’ in leaked memo

With expensive hardware and constant price increases, some analysts argue that video games are becoming a luxury for the affluent. And when a PlayStation 5 Pro costs more than $900 after taxes, the contentious idea is difficult to argue against. Recent rumblings from the video game industry, however, are indicating that publishers know that consumers are being pushed to their financial limit. Something has to give, and it seems that newly appointed Xbox CEO Asha Sharma knows it.

The Verge reports that a leaked memo penned by Sharma featured the executive pontificating on the value that Xbox brings to its fans. Game Pass, the subscription service that controversially increased prices two years in a row, is central to that value, Sharma argued. Microsoft has yet to find a balance when it comes to pricing, Sharma wrote.

“Short term, Game Pass has become too expensive for players, so we need a better value equation,” Sharma said. “Long term, we will evolve Game Pass into a more flexible system which will take time to test and learn around.”

The memo evidently does not outline a solution or approach for Microsoft, but value is increasingly an existential crisis for the industry. Sony has also been experimenting with dynamic pricing that tempts PS5 owners with customized game discounts. In March, Nintendo announced that it would sell digital versions of first-party games at a lower price point than physical versions, starting with the release of Yoshi and the Mysterious Book. Fortnite publisher Epic Games also caught heat recently for increasing the cost of V-Bucks, the digital currency used to purchase cosmetics in the battle royale game.

Microsoft has similarly tested what consumers might be willing to pay for Game Pass. The popular subscription service attempted to justify its most recent price increase with the addition of perks like Fortnite Crew and Ubisoft Classics. Microsoft does not publicly disclose subscription numbers, but at least some fans vowed to drop the service once the new prices went into effect. Game Pass’ ability to retain subscribers ultimately comes down to the titles it offers — and by Microsoft’s own admission, first-party titles like The Outer Worlds 2 did not perform as well as expected.

A price drop could lure consumers back into the fold, but the question remains how, exactly, Microsoft gets there. Some rumors suggest that the publisher might remove the Call of Duty franchise from Game Pass altogether. There are also whispers that the next Xbox could be way more expensive than Xbox Series X.

Whatever Microsoft decides, all eyes are on Sharma. The executive caught flak over her apparent lack of “gamer credentials” shortly after being appointed, but a price drop on Game Pass could help regain the trust of hardcore gamers.