Microsoft’s decision to include Call of Duty in Xbox Game Pass has reportedly resulted in a loss of over $300 million in sales on Xbox consoles and PC. This choice was part of Microsoft’s broader strategy to strengthen Game Pass subscriptions and attract more players. However, the move has sparked discussion about the financial sustainability of the service and whether it delivers the value Microsoft anticipated.

Game Pass: A Complex Strategy

Launched in 2017 at $10 per month, Xbox Game Pass aimed to transform gaming by offering access to a large library of games for a fixed subscription fee. Over time, Microsoft expanded the service by introducing day-one releases exclusively on the Ultimate and PC tiers, which increased the subscription price. The goal was to make Game Pass a central part of gaming. Yet, the rapid growth Microsoft expected has not fully materialised, leading to doubts about the long-term viability of the model.

Internal Insights

A former employee, speaking to Bloomberg, noted that including Call of Duty in Game Pass significantly affected overall sales. Joost Van Dreunen, founder of the video-game analytics firm Aldora, observed that Game Pass had not produced the expected surge in subscriptions. He also pointed out that the infrastructure costs of running the service are not aligning with the pricing model. These findings have led Microsoft to reassess its approach and financial strategy for Game Pass.

Regulatory Perspectives

The acquisition of Activision Blizzard by Microsoft, which brought Call of Duty under its control, faced scrutiny from regulatory bodies. Former Federal Trade Commission Chair Lina Khan expressed concern about the potential negative consequences for both consumers and developers. She highlighted that such acquisitions could result in price increases and workforce reductions, which could harm the overall gaming community. Khan also cautioned that growing market consolidation could reduce competition and limit accountability.

The Road Ahead

Microsoft has responded to the challenges by announcing a 50 percent increase in the price of Xbox Game Pass Ultimate, raising the monthly fee to $30. The company believes this adjustment will help cover infrastructure expenses and enhance profitability. This decision reflects the complexity of balancing affordability with sustainable growth. Industry observers will watch closely to see whether the higher price will drive more subscribers to Game Pass or cause a decline in its user base.

Conclusion

The decision to make Call of Duty available through Game Pass represents a bold strategic choice for Microsoft. While it strengthens the Game Pass offering, it has had clear financial consequences, leading to a loss of significant revenue. The situation underscores the tension between subscription-based gaming models and traditional game sales. As Microsoft adapts its approach, the broader gaming industry will observe closely how this experiment shapes the future of gaming subscriptions and whether it sets a precedent for other platforms.