Microsoft Gaming CEO Phil Spencer announced his retirement Friday, marking the end of a 25-year career at Xbox (and a nearly 40-year career at Microsoft more broadly). Spencer’s legacy covers a wide range, including a string of high-profile studio acquisitions and closures, though few measure up to the impact of Xbox Game Pass. As Xbox enters a regime change, with all the upheaval C-suite turnover traditionally tends to bring, what happens to Game Pass next?
Spencer rolled out Xbox Game Pass in 2017 as a sort of Netflix for gaming: For a monthly fee, Xbox users could access a service that provided a library of on-demand downloadable games. As long as you maintained your subscription, you could continue playing those games.
Game Pass started slim, but by 2018, Xbox began putting some real weight behind it. At the start of the year, Spencer said that first-party Xbox games would be included as part of the Game Pass library the same day they were released. That year alone, AAA tentpoles like Forza Horizon 4, Sea of Thieves, and State of Decay 2 indeed became available via Game Pass on their respective launch days. The math around buying new Xbox games changed overnight. Would you pay $60 to own the game outright? That could cover half a year of Game Pass, giving you not only the game you wanted but hundreds more.
In those early years, particularly as governments around the world implemented COVID-related social distancing mandates that resulted in a surge of popularity for the games industry, Game Pass felt too good to be true. (Back then, a new subscription also only cost $1 for your first month.) First-party games like Crackdown 3 and The Outer Worlds continued to launch day-one on Game Pass. But the service also pulled in major tentpoles from third-party companies as well — true behemoths like Red Dead Redemption 2. And it supplemented the library with smaller gems like Ori and the Will of the Wisps. Around the same time, Microsoft rolled out additional tiers of Game Pass, including a PC version and a higher tier that included Xbox Live, which was then-necessary for playing online games. Game Pass was often referred to as the “best deal in gaming.” And for a while there, it legitimately was.
Then the business reality set in.
This is the way it always happens with subscription models: start with an enticing deal, then slowly ramp up the prices once subscribers are locked in. In early 2023, Microsoft ended its $1 introductory month. The price increases followed shortly after. For years, Xbox Game Pass cost $10 a month for its basic tier and $15 for its premium one. But in July 2024, Microsoft restructured Game Pass so it included five tiers, with confusing verbiage as to what was included in which. The biggest hit was that day-one Xbox Game Studios games — arguably the biggest selling point of Game Pass — would henceforth only be available at the priciest tier, Xbox Game Pass Ultimate, which jumped to $20 a month. A year later, Microsoft hiked prices and restructured the service’s tiers again. Xbox Game Pass Ultimate now costs $30 a month. (The lower two tiers, Essential and Premium, are $10 and $15 respectively.)
Throughout the Game Pass era, Microsoft hasn’t exactly been transparent about the service’s subscriber base — or its profitability. Instead of outright saying each quarter or year how many people subscribed to Game Pass, Microsoft has doled out numbers either in smoke and mirrors or at convenient times. In 2021, Game Pass grew by 37%. (37% of what? Who knows!) In 2022, as Xbox aimed to sway the courts (of both public opinion and of regulators), Spencer revealed the service sported 25 million subscribers. The most recent public estimate, made by now-outgoing Xbox president Sarah Bond in a 2024 episode of the Official Xbox Podcast, pegged the figure at around 34 million. But it’s unclear how many members are subscribed at each tier. And the most recent price hikes spurred subscribers to publicly declare en masse they’d cancel subscriptions. (The web page used to cancel Game Pass subscriptions reportedly suffered outages shortly after Microsoft announced those price increases.)
All of this amounts to an unclear picture of how Game Pass measures up amid the Xbox business or the broader corporate structure. It’s surely not going away, not any time soon; even if numbers have flatlined or dropped since Bond’s 2024 estimate, that’s tens of millions of pissed-off fans. Is there a world where new Xbox boss Asha Sharma determines that new Xbox games won’t turn enough profit while releasing day-one on Game Pass? Maybe. The latest Call of Duty: Black Ops 7, meant to prove the worth of Xbox’s acquisition of Activision Blizzard, didn’t exactly light up 2025 sales charts the way the series usually does (though many players did play the game via Game Pass). Then again, Game Pass itself accounts for a solid fifth of Xbox’s annual revenue, as revealed in court documents tied to the Activision acquisition. Removing the service’s biggest draw entirely only gives subscribers more reasons to cancel.
Polygon has reached out to Xbox and will update this story if we get a response, but at the end of the day, one thing’s for sure: Everything everywhere is getting more expensive, and Microsoft, like its competitors, has shown a willingness to raise prices, not just on Game Pass itself, but on Xbox consoles too. This is Econ 101, people. Once the prices go up, that is historically the direction they keep heading.
