The newly appointed head of Microsoft’s gaming division, Asha Sharma, has unveiled her inaugural significant decision since assuming the role, presenting subscribers with both benefits and drawbacks.
Microsoft has revealed plans to reduce the monthly cost of Xbox Game Pass Ultimate by seven dollars, bringing it down from $29.99 to $22.99. The compromise, however, involves removing day-one access to upcoming installments of the popular Call of Duty series from Activision, which Microsoft owns.
These modifications were made public on Tuesday, following Sharma’s acknowledgment in an internal communication that became public last week, where she admitted Game Pass pricing had climbed too high and committed to improving the value proposition for subscribers.
The gaming division at Microsoft has faced challenges recently. During the latest holiday quarter, gaming revenue decreased by 9 percent to $5.96 billion, with Xbox content and services falling short of internal expectations.
The dramatic 50 percent price increase implemented last October, which pushed Xbox Game Pass Ultimate to $29.99 monthly, was generally interpreted as necessary to offset the expense of incorporating new Call of Duty releases into the subscription service.
According to the revised arrangement, upcoming Call of Duty releases will become available on Game Pass approximately twelve months after their initial launch, arriving during the subsequent holiday season. Games already in the library will continue to be accessible to subscribers.
Additionally, Microsoft is lowering the cost of PC Game Pass from $16.49 to $13.99 per month.
Sharma assumed the position of CEO for Microsoft Gaming this past February, succeeding Phil Spencer, who concluded a 38-year career with the company. Before this appointment, Sharma led Microsoft’s CoreAI product organization and previously held positions as chief operating officer at Instacart and vice president at Meta.
Despite joining the role without previous executive experience in the gaming sector, Sharma promised to renew focus on dedicated Xbox enthusiasts and place exceptional gaming experiences as the top priority. She also elevated Matt Booty, the veteran studio chief, to executive vice president and chief content officer.
This Game Pass pricing modification prompts speculation about whether this represents an isolated adjustment or marks the start of more comprehensive changes. Sharma’s internal memo from the previous week suggested broader ambitions, indicating Microsoft plans to transform Game Pass into “a more flexible system.”
The announcement comes at a critical juncture for Microsoft’s gaming operations, which have been navigating financial pressures and subscriber expectations. The decision to delay Call of Duty’s Game Pass availability represents a strategic shift in how Microsoft manages its most valuable gaming intellectual property within its subscription ecosystem.
Industry observers note that this move could signal a recalibration of Microsoft’s approach to Game Pass, potentially introducing more tiered offerings or variable release windows for major franchises. The reduction in subscription costs may help address concerns about affordability while Microsoft seeks to maintain profitability across its gaming portfolio.
The changes reflect ongoing challenges in the subscription gaming market, where companies must balance attractive pricing for consumers against the substantial costs of developing and acquiring premium content. Microsoft’s acquisition of Activision Blizzard, which included the Call of Duty franchise, represented one of the largest deals in gaming history, and the company continues to determine the optimal strategy for maximizing returns on that investment.
Whether these adjustments will successfully address subscriber concerns and improve the gaming division’s financial performance remains to be seen, but they represent Sharma’s first concrete steps toward reshaping Microsoft’s gaming strategy under her leadership.