Xbox Game Pass: a new direction under Asha Sharma

Microsoft Gaming CEO Asha Sharma has recently said that Xbox Game Pass has become too expensive for players. Sharma is aiming for a "better value for money" proposition and more flexibility for users. The news marks a potential turning point for the subscription service, which has played a major role in the gaming industry in recent years.

The current challenges facing Game Pass

According to research, Xbox Game Pass is performing well in terms of customer retention, but it needs a new approach to drive further growth. Joost van Dreunen, a researcher and educator, suggests that embracing advertising could be a solution for Microsoft and the gaming industry. A former PlayStation executive even described Game Pass as being "in deep water".

Van Dreunen has also floated the idea of an "ultra-low" Game Pass tier, potentially priced at $6 per month, as a way to create more flexibility. He points out that while subscriptions change buying behavior, they often do not significantly expand the overall market.

The current price of Game Pass Ultimate, which sits at $30 per month, is seen as unsustainable. Van Dreunen argues that Microsoft should look at a broader market of more than 3 billion people who "don’t want to pay anything" for gaming, and that offering free content in exchange for ads could be an effective strategy.

The proposed ad models

Van Dreunen further argues that gaming should move toward a model more like other forms of media such as television, radio, and the internet, which rely on advertising for revenue. He believes Xbox may become more dependent on ads in the future. This would be a natural shift in the media sector, similar to what streaming services have done.

During an earlier experiment in 2006, Microsoft bought in-game advertising company Massive Inc., which was eventually shut down in 2010. Van Dreunen notes, however, that gaming is now much bigger than it was then, and is no longer a "subculture" but rather a mainstream "media market".

A possible partnership with Netflix

One interesting possibility on the horizon is a partnership with Netflix. Sharma and Netflix co-CEO Greg Peters have discussed ideas for joint subscription bundles. While no concrete plans have been made, Peters is optimistic that there are opportunities to combine the two platforms in a way that benefits consumers.

Sharma, who became CEO of Microsoft Gaming in February, has already made moves by ending the "This is an Xbox" campaign, signaling that she is determined to take Xbox to new heights, even if that means rethinking existing strategies.

Microsoft’s focus on rethinking pricing and bundling, along with the potential for advertising, could mark a fundamental shift in Xbox Game Pass strategy. How these plans will develop remains uncertain for now, but the signs point to a dynamic future for the subscription service.