The company simply realized that it could not gain enough subscribers to make the service profitable.
Veteran game analyst and former SuperData Research founder Joost van Dreunen offered his take on the recent 50% increase in Game Pass subscription costs.
The analyst says the service was too profitable for users, drawing parallels with airline business models, where first-class passengers partially subsidize flights for people in economy class.
In Game Pass, every user effectively flies business class while paying economy class prices, creating an inherently unprofitable model in which active users consume disproportionately large resources without proportionate revenue.
According to the analyst, when Microsoft realized that it could not gain the desired number of subscribers even at relatively low prices (as the company and some experts had hoped), the next logical step was to restructure the service to ensure its self-sustainability. This led to the introduction of a multi-tiered model (Essential, Premium, and Ultimate), which van Dreunen believes may be the right formula.
Microsoft is not abandoning Game Pass, but transforming it. The transition from a one-size-fits-all subscription to a segmented model where price better matches usage levels may be the solution that Stadia and similar services lacked.
