Microsoft doesn’t seem worried about the recent backlash to the Game Pass price hike. In fact, they’re expecting subscriptions to increase and cut losses in Xbox’s services division next quarter.
In their latest earnings call for Q1 fiscal year 2026 (July to September), Microsoft executives revealed that Xbox’s content and services revenue, which includes Game Pass, is stable and even seeing growth. This period doesn’t include revenue from the Game Pass price hike, which took effect in most countries in October and will roll out everywhere else in November. We’ll only see its effects on the next earnings call in late January 2026.
Interestingly, one executive said that despite expecting losses in services and subscriptions, they’re anticipating an increase in Game Pass subscriptions.
“And in Xbox content and services, we expect revenue to decline in the low to mid-single digits against a prior year comparable that benefited from strong first-party performance, partially offset by growth in subscriptions.”
This language is curious. Are they expecting subscriber numbers to rise, or just revenue? If subscription numbers decrease less than revenue increases from the price hike, it could still be viewed positively. But it does sound like Xbox is betting more people will subscribe to Game Pass.
They’re likely confident because of the sheer volume of day-one releases on Game Pass, like Outer Worlds 2 and Call of Duty: Black Ops 7. Xbox has invested heavily in fresh game availability, and Microsoft believes this library will keep people subscribed or attract new subscribers.
However, this doesn’t reflect the sentiment when Microsoft announced the price hikes. Many players, including ourselves, became skeptical about Game Pass’s future, believing it would make gaming less accessible. A $30 price tag for the full library doesn’t feel worth it anymore, considering Game Pass’s main appeal was paying less than an indie game’s price to access not only indies but also expensive titles. At $30, it might make more sense to save that money and buy games for $60 or $70 and actually own them instead of subscribing.
Microsoft’s strategy suggests either they genuinely believe their products will be compelling enough to justify the higher price, or they’re trying to reassure investors amid community backlash.
