A leaked internal memo from Microsoft’s new Xbox leadership acknowledges what many subscribers already feel: Xbox Game Pass has gotten too expensive.
The document, acquired by The Verge, shows the gaming chief telling staff that the subscription service’s pricing has risen to an unsustainable point. The memo signals Microsoft is exploring changes to Game Pass rather than sticking with the current approach.
Microsoft is working toward what the memo describes as a “more flexible system” that would rebalance the “value equation” for subscribers. No concrete price cuts or new tiers have been announced yet, but internal planning and testing is underway.
The acknowledgment comes as Game Pass pricing has climbed significantly across regions. Ultimate tier subscribers now pay around $17-$20 monthly in the US before taxes. International markets have seen even sharper increases, with Brazilian subscribers reporting Ultimate doubled from R$60 to R$120 overnight.
The leaked language around a “flexible system” suggests Microsoft may introduce multiple new tiers at different price points or move to a modular add-on model. This could mean a cheaper ad-supported plan, optional add-ons for features like cloud gaming, or restricting day-one releases to premium tiers only.
Game Pass launched as a high-value proposition, offering access to hundreds of games plus day-one first-party releases for a low monthly fee. As pricing increased, subscribers began questioning whether maintaining a year-round subscription makes sense versus buying a few games outright or cycling the service on and off.
The economics behind the service have always been challenging. Putting expensive AAA releases into a subscription at launch cuts into traditional game sales revenue. Microsoft has tried to offset this with higher subscription pricing and tier restrictions, but the memo suggests leadership believes they’ve pushed too far.
What changes could look like
A “flexible” Game Pass could take several forms. Microsoft might offer a bare-bones library tier without day-one releases, a mid-tier with selective new games, and a premium tier with everything. Alternatively, they could use add-on pricing where subscribers pick features like cloud streaming or premium catalogs.
The approach would mirror trends in video streaming, where services offer ad-supported plans, standard plans, and premium bundles. The difference is games cost significantly more to produce and include at launch than most streaming content.
