Microsoft Confirms Xbox Game Pass Ultimate Price Increase Delay in Some Countries — but Not the U.S. or UK

Microsoft has delayed the controversial 50% price increase for Xbox Game Pass Ultimate (from $19.99 to $29.99 monthly) in certain countries, such as Ireland and South Korea, citing "local requirements" that protect existing subscribers from immediate changes. This delay does not apply to the U.S. and UK, where the hike is proceeding as planned, despite Microsoft's justification of expanded content and cloud upgrades. The decision has already sparked significant consumer backlash, with over 50% of surveyed users indicating they would not subscribe at the new rate, and comes amidst other recent Xbox cost increases, including scrapped DLC discounts and higher console pricing, signaling a broader strategy of monetization challenges.

Analysis

Microsoft has delayed its controversial Xbox Game Pass Ultimate price increase in some countries — but not the U.S. or UK. Last week, Microsoft sparked a backlash with its decision to raise the price of Xbox Game Pass Ultimate from $19.99 a month to $29.99 a month (a 50% increase that amounts to an extra $120 a year). To justify the price hike, Microsoft upped the number of day one releases per year to 75, and added Fortnite Crew and Ubisoft+ Classics for the first time ever. There were also upgrades to Xbox Cloud Gaming streaming quality. Microsoft said the new $30 a month Ultimate price reflected “the expanded catalog, new partner benefits, and upgraded cloud gaming experience.” But that didn’t stop fans from reassessing whether Game Pass remained right for them. IGN’s poll on the issue, which now has over 41,000 voters, shows 53.9% of our audience will not subscribe to Game Pass at all. 19.9% said they were going for Ultimate despite the price rise. The updated pricing went into effect on October 1 for new subscribers, and was set to kick in on November 4 for all current subscribers. But now, Microsoft has confirmed it has delayed the Ultimate price hike in some countries, such as Ireland and South Korea. In an email to subscribers in these countries, Microsoft said the increases would only affect new subscribers, not existing subscribers, as long as they auto-renew. If Ultimate subscribers cancel then re-subscribe, they’ll be charged at the new rate. Microsoft subsequently confirmed the decision. In a statement to The Verge, the company said the delay was due to “local requirements,” which likely means the company must give subscribers a set period of time before making price changes. Unfortunately for subscribers in the U.S. and UK, this does not apply to them. “Our recent Game Pass update remains unchanged,” Microsoft said in the statement. “Current subscribers in certain countries will continue renewing at their existing price for now, in line with local requirements. We’ll provide advance notice before price adjustments take effect in these countries.” The “for now” part of Microsoft’s statement suggests the price hike will eventually hit all countries in which Ultimate is available. It’s a case of when, not if. This week, Microsoft confirmed it had also scrapped the Xbox Game Pass discount on DLC purchases, giving subscribers more points for use in its Rewards scheme instead. That change hasn't gone down well, either. The cost of being an Xbox fan has been a hot topic in recent months. After announcing a jump to $80 for its games due out this holiday, Microsoft back-tracked to stick with $70 for the likes of The Outer Worlds 2. And just last month Microsoft raised the price of Xbox consoles in the U.S. "due to changes in the macroeconomic environment." Microsoft similarly raised eyebrows when it confirmed a $999.99 price tag for the upcoming ROG Xbox Ally X handheld, and $599.99 for the ROG Xbox Ally. Photographer: Patrick T. Fallon/Bloomberg via Getty Images. Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at [e-mail] or confidentially at [e-mail]. Microsoft is implementing a substantial 50% price increase for its Xbox Game Pass Ultimate service, raising the monthly fee from $19.99 to $29.99 in key markets like the U.S. and UK. This significant adjustment is justified by an expanded content offering, including 75 day-one releases annually, new partner benefits like Fortnite Crew and Ubisoft+ Classics, and enhanced cloud gaming quality. Despite the added features, the price hike has generated substantial consumer backlash, with an IGN poll indicating 53.9% of respondents would not subscribe at the new rate, signaling potential churn. Microsoft has partially delayed the price increase for existing subscribers in certain countries, such as Ireland and South Korea, citing "local requirements" for advance notice; however, this deferral does not apply to the U.S. and UK. This Game Pass adjustment aligns with a broader trend of increased monetization within Microsoft's Xbox division, following recent console price hikes in the U.S. and the discontinuation of DLC discounts. The "for now" phrasing regarding global implementation suggests Microsoft intends to roll out the higher price worldwide, implying a strategic shift towards extracting greater revenue per user. The moderately negative sentiment surrounding MSFT (-0.7) and the pessimistic tone reflect investor and consumer concerns over these aggressive pricing strategies. This approach introduces regulatory and consumer relations risks, despite the company's efforts to enhance service value.

Key Decisions for Investors

• Investors should closely monitor Xbox Game Pass Ultimate subscriber retention rates and average revenue per user (ARPU) shifts in Microsoft's upcoming earnings reports to gauge the impact of these price increases.
• Evaluate the potential long-term effects of aggressive pricing on Microsoft's brand loyalty and overall ecosystem growth within the competitive gaming market.
• Assess the risk of further regulatory scrutiny or sustained consumer backlash, particularly as Microsoft indicates a global intent to implement these higher price points.
• Consider whether the increased revenue per subscriber sufficiently offsets potential subscriber churn and a moderately negative sentiment, impacting MSFT's gaming division profitability.