Xbox Price Cuts: Microsoft Slashes Game Pass Rates to Win Back Fans

Microsoft Corp (NASDAQ:MSFT) is revamping its gaming strategy to boost value and better compete, focusing on pricing and content changes to re-engage users.

Microsoft Cuts Prices and Resets Content Strategy

The company cut Game Pass Ultimate to $22.99 from $29.99 and lowered PC Game Pass to $13.99, responding to feedback and aiming to "recommit to our core Xbox fans and players," as new gaming head Asha Sharma leads the shift.

Microsoft acknowledged that "there isn't a single model that's best for everyone," and said the changes reflect user preferences, CNBC reported on Tuesday.

At the same time, Microsoft is changing how it monetizes content by removing day-one access to new "Call of Duty" titles from subscriptions, encouraging direct purchases or delayed access instead. The move comes as the gaming unit faces pressure, with revenue declining and Xbox content and services missing internal projections, according to finance chief Amy Hood.

The strategy highlights a pivot to improve profitability and engagement in gaming—an area that lags faster-growing businesses like Azure and Microsoft 365—while repositioning its subscription model to better compete in a shifting market.

Sony Raises Prices to Protect Margins

Recently, Japanese gaming company Sony Group (NYSE:SONY) raised PlayStation hardware prices globally to support margins amid economic pressures.

The company increased prices for PS5 models and related devices by $100 to $150 starting April 2, citing "continued pressures in the global economic landscape."

It implemented higher pricing across key markets, including the U.S., U.K., Europe, and Japan, as part of its strategy to sustain profitability despite shifting demand conditions.

Tariffs Drive Industry-Wide Price Hikes

Nintendo Co, Ltd (OTC:NTDOY) and Sony have also raised console prices to offset U.S. tariffs on China-made devices, which face duties of up to 125%. The companies passed these costs to consumers, with estimates suggesting U.S. buyers may pay up to 30% more for consoles.

Bloomberg analyst Nathan Naidu said Sony may struggle to maintain demand at higher price points, while Microsoft could face less pressure due to lower exposure to tariff-affected manufacturing.

MSFT Price Action: Microsoft shares were up 0.86% at $427.80 during premarket trading on Wednesday, according to Benzinga Pro data.

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