Microsoft’s Xbox chief Asha Sharma is preparing Xbox employees for changes to Xbox Game Pass pricing, according to an internal memo obtained by The Verge. In the memo, Sharma states that “Game Pass has become too expensive for players” and that Microsoft needs “a better value equation.” She also frames the next step as evolving Game Pass into a “more flexible system” that will take time to test and learn around.
What the leaked memo says about pricing and system design
Sharma’s memo, as reported by The Verge, addresses two time horizons. In the short term, she says Game Pass has become too expensive for players and Microsoft needs a better value equation. In the long term, she says Microsoft will evolve Game Pass into a more flexible system, noting that it will “take time to test and learn around.”
In the same memo, Sharma characterizes Game Pass as central to gaming value on Xbox while also stating that the current model is “not the final one.” She also references “online chatter” about rumors of Microsoft changing Game Pass pricing and says she will “go deeper” with Xbox employees the following week.
The memo suggests that the subscription experience may not remain a single, static bundle. A “more flexible system” could involve changes to how tiers are structured, how access is granted, or how content is allocated across the service, though the memo excerpt does not specify the mechanism. According to The Verge’s reporting context, no immediate price changes are expected in the coming days.
The pricing increase that prompted the current assessment
The memo’s concern about cost follows a major price adjustment. Microsoft increased the price of Xbox Game Pass Ultimate to $29.99 per month last year, which The Verge describes as a 50 percent increase. The company justified the price increase with upgrades across all Xbox Game Pass tiers, according to The Verge.
While the memo does not provide new subscriber metrics, it indicates that Sharma’s internal assessment is that the current model has become too expensive for players. The Verge reports that the cost increase “has clearly taken its toll on Game Pass.”
Call of Duty’s role in subscription costs
The Verge connects the current pricing pressure to Microsoft’s decision to add Call of Duty to the subscription service. The Verge previously reported that Microsoft had debated whether to include new Call of Duty releases in Game Pass, with concerns from some at the company that revenue from typical Call of Duty sales could be affected by Game Pass inclusion.
According to The Verge, Microsoft added Call of Duty to Game Pass in summer 2024. When a subscription service adds major releases, it may need to adjust pricing to maintain service economics—particularly if licensing terms are tied to ongoing releases. While the memo excerpt does not explicitly attribute the “too expensive” assessment to Call of Duty, The Verge’s reporting presents the decision as part of the cost increase context.
External commentary on potential changes
Beyond Microsoft’s internal memo, subscription strategy has been the subject of industry discussion. The Verge reports that Windows Central’s Jez Corden suggested Microsoft might remove Call of Duty from Game Pass. Corden stated: “If they take Call of Duty out of Game Pass this year, which is a possibility from what I’ve heard, I think it will kind of reveal some of the cracks in the strategy, possibly.”
The Verge frames this as a possibility and notes that removing a content pillar could expose weaknesses in the strategy. However, this represents Corden’s commentary on a potential scenario rather than confirmation from Microsoft.
What comes next
Sharma’s memo points to an evolution toward flexibility, but does not specify whether this will be achieved through pricing adjustments, tier restructuring, content inclusion changes, or access rule modifications. The combination of (1) the statement that Game Pass is too expensive, (2) the 50 percent price increase to $29.99 for Ultimate, and (3) Call of Duty’s reported role in the subscription suggests Microsoft may revisit how content licensing and subscription packaging interact.
According to The Verge, immediate changes should not be expected in the coming days, though Sharma appears to be preparing to address the pricing issue in the coming weeks.
Source: The Verge