Game Pass Announcement Eases Some Pressures At Xbox But Adds Some Elsewhere

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Today's news that Xbox Game Pass would be getting price increases and new tiers was big news, yet we all saw it coming.

With Microsoft spending so much money on studios a price increase was inevitable. Yet today's news has been met with mixed reactions. Some are fine with the price increase, some are furious. Many are confused about the new Standard tier. For those that don't know the new Standard tier is only for Xbox consoles and will be game pass without day 1 games. Why they didn't just make Core the standard I have no idea.

The idea behind this new tier is to guide players to the more expensive ultimate tier. Business wise it makes sense as they want the most money. The problem with that theory is Xbox has already told us most Game Pass users subscribe to ultimate so I'm not sure how much this will move the needle in that regard. It's also quite clear that they really want more PC players seeing as how the PC Game Pass will keep day 1 games.

Indiana Jones, one of many games new Xbox game pass subscribers won't get day 1 without ultimate

I've talked in the past how Xbox Game Pass likely needs to reset and do away with day 1 games and to a degree they have, I'm just not sure this was the way to do so, at least not in such a "muddy the waters" type of way. A day 1 tier and non day 1 tier makes sense. But just have those 2 tiers then. People like simple.

What isn't clear, and I hope they clear up rather quickly, is when day 1 games will go into standard. And it needs to be clear as day. No "case by case basis". It needs to be "first party games will be in standard in 3,6,12 months" whatever the time is they land on.

Secondly I'm very curious how this affects day 1 third party deals. Will those day 1 games have shorter run times in game pass so they don't get passed down to standard? Will they have longer run time because standard represents a new contract? Time will tell here.

But let's talk about what this does do for a moment, specifically the price increase of ultimate. There's pros and cons to this from both a business and consumer standpoint if you can sit back and see the bigger picture IF (big if) done right. In my opinion this puts added pressure on parts of Xbox but relieves pressure elsewhere within Xbox. Let's dive into it.

Pressure Release Valve

The biggest thing this price increase does for the company, at least in my opinion, is give the studios within Xbox more room to breathe. The margins for Game Pass were very slim (or non existent depending on who you choose to believe). This move represents a roughly 20% increase on margins, depending on the country we're talking. That's a lot more room for error.

Maybe Arkane Lyon would have been allowed to stay afloat if these prices were in place?

Now I'm not saying this suddenly means a studio can produce a complete dud and be safe. They would still have internal numbers to hit and all that fun stuff. But what it does mean is those numbers can in theory come down a little, especially for the games that aren't necessarily meant to increase subs.

Games like Starfield and Gears will need to do well. Instead of calling these games system sellers they are now more so subscription sellers. But there won't be a much pressure on the Hellblade's and Avowed's of the world to move major subs. They still need to be good but there should be less pressure there in terms of worrying about being shuttered for 1 false move.

As a fan it should also mean more games. They need to justify the price increase and what better way to do that then giving more games. Many will dub this move the Call Of Duty price increase, but whatever you want to call it the end result should be more games. If a $40 a year increase gets you a few more games per year most would likely take that trade. Speaking of which....

Pressure Cooker

One of the main things I've seen people talk about after this is that they've increased the price without giving consumers anything for that price increase. What Xbox will say is they've added more games which is what Game Pass is all about. It's now on leadership to show that value more than ever. The pressure is all on them.

Under no circumstances can you do a 20% increase and continue the same output they currently have. They are doing this increase at the perfect time from a PR standpoint because the rest of 2024 is (on paper) a stacked lineup. As mad as some people are they likely won't be as mad when they have new games coming before they can even finish the last one.

The pressure is on Phil Spencer more than ever to produce his vision

What they cannot do now however is have another 2022. Hell I'd argue they can't have another 2023 with this move. They have enough studios and have had enough time with those studios to put out at bare minimum 4-5 bigger first party releases. The price is getting to a point where without that people will likely start to leave. Harness what you have and deliver the goods. More than ever you can't afford not to.

Ultimately, pun intended, where you fall in this decision is up to you, and I won't fault you no matter what way your reaction goes. Where I fall on this is up to Xbox. Give us a more spread out version of 2024 and I'm reluctantly ok with it. Give us another 2022 and I'm likely cancelling my subscription.

Let's just hope this gives more stability to studios and more games to consumers, because if not? Woof.