Last week there was a rather striking announcement regarding the service of Xbox Game Passsince the price increase was confirmed for all membership levels, adding that now a new level called standard is coming, which removes new users from the possibility of trying new launch titles. And according to what famous analysts indicate, it was inevitable that this would happen, since the green company has made many high-importance expenses in recent years such as the purchase of Activision.
Among the reasons why Xbox is increasing are not new, analysts tell the media as IGNThis already happened last year. Piers Harding-Rolls of Ampere Analysis He notes in his own writings on the topic that the cost of creating and releasing games has gone up, and they want to make money, plain and simple. They need their subscribers to pay more to offset the costs of licensing games in general, as well as the cost of adding a significant annual premium release that was disguised as the next Call of Duty.
For its part, Mat Piscatella mentions that the subscription market in general has been stagnant in recent years, and this also applies to PlayStation. Spending on video game subscription services has declined slightly so far in 2024 compared to a year ago, to $2.2 billion, and cloud gaming subscription offerings have not been met with exuberance by gamers. As a result, Xbox You must make changes if you want to achieve your long-term goals. But there are only so many possible changes you can make.
Here are some of the statements:
When you need to grow revenue, as Xbox bosses do, you only have a couple of levers when it comes to Game Pass. It’s either volume or performance. And it’s clear that volume has been increasing, plateauing for some time, both on Game Pass Core (formerly Xbox Live Gold) and actual Game Pass.
Xbox has done a good job of gradually moving its subscribers from the cheaper Live Gold to Game Pass. But now they need to keep growing and/or keep paying for the larger divide they’ve created with all these acquisitions. So the new changes are moving Game Pass subscribers into higher tiers, while creating select middle tiers for those who don’t want Day 1 games.
One of the analysts mentions that the increase in prices of Xbox was and remains “inevitable” due to current inflation as well as the aforementioned slowdown in subscription growth. So the company needs to increase average revenue per user or ARPUespecially in an effort to offset sales of single copies of the new Call of Duty which will inevitably lose to Game Pass. If the balance is not reached, we will probably see a further increase next year.
Via: IGN
Author’s note: We’re still saving ourselves from Nintendo not following suit, after all they don’t offer free games at launch. As for Sony, let’s hope they don’t go any further, we already had enough last year with their little surprise.
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