Last week Xbox announced a very significant price hike of the subscription fees for Xbox Live Gold, fans prompted Microsoft to reverse the polemic decision. Daniel Ahmad Analyst at Niko Partners affirms that the move was done to make Xbox Game Pass Ultimate look even better.
The official statement from Xbox during the announcement of the price hike affirms that the change is needed as the price of the subscription has been sustained for ten years.
Periodically, we assess the value and pricing of our services to reflect changes in regional marketplaces and to continue to invest in the Xbox community; we’ll be making price adjustments for Xbox Live Gold in select markets. In many markets, the price of Xbox Live Gold has not changed for years and in some markets, it hasn’t changed for over 10 years.
Following the backlash on social media, and fears of fans seeing PlayStation as a cheaper alternative, Xbox released an official statement in which they claim that fan’s feedback allowed the marketing team to “see the player at the center of their experience” and pull back the decision.
Double the cost of Xbox Live Gold over a 12 month period. Why?– The assumption that most users will see the value in upgrading to a Game Pass Ultimate sub.– Even if some do not shift, the assumption is they stay on Gold at the higher cost, which increases sub revenue anyway.
The F2P announcement has been in the works for months and that announcement was dropped today to help offset the backlash from the original price increase announcement. Microsoft will continue its focus on Game Pass moving forward, and its acquisition of IP for the service.— Daniel Ahmad (@ZhugeEX) January 23, 2021
On a recent appearance on the Dropped Frames Podcast, Phil Spencer stated that Xbox Game Pass “completely sustainable” at its current cost, while reassuring that Microsoft has no plans for increasing the price of the subscription anytime soon.
Ahmad expects that Microsoft will continue investing in Xbox Game Pass and further acquisitions of IPs.
Source: Daniel Ahmad