The current model isn't the final one
In a leaked internal memo, Xbox CEO Asha Sharma has acknowledged what subscribers have long felt: Game Pass has grown too costly for the value it promises. Her admission arrives in the wake of a fifty percent price increase and the removal of annual savings options, placing her early tenure at the intersection of corporate candor and consumer trust. The service that once reimagined gaming access now finds itself a cautionary symbol of the tension between platform ambition and the limits of what people will pay.
- Game Pass Ultimate has jumped from $19.99 to $29.99 per month — a 50% increase driven in part by the cost of adding Call of Duty to the library.
- Microsoft quietly eliminated annual subscription discounts, locking users into higher month-to-month rates with no relief in sight.
- A leaked memo from new Xbox CEO Asha Sharma openly admits the pricing has become unaffordable, a rare moment of leadership transparency that signals internal alarm.
- Sharma has promised a more flexible subscription model long-term, but warns that testing will take time — offering acknowledgment without immediate remedy.
- Reports of a potential merger between Game Pass Premium and PC Game Pass tiers threaten to push costs even higher, deepening the contradiction between stated concern and likely action.
Asha Sharma, the newly appointed head of Xbox, has publicly conceded what players have been voicing for months: Game Pass has priced itself out of reach. The admission surfaced in a staff memo that leaked to The Verge, offering an unusually candid look at how Xbox leadership is grappling with a service that was once its greatest competitive advantage.
The pricing shift that triggered the backlash came last October, when Microsoft raised Game Pass Ultimate from $19.99 to $29.99 per month — a fifty percent increase — while also eliminating the option to subscribe annually at a discount. The cost of bringing Call of Duty into the service ahead of Black Ops 7's launch was cited as a key driver, a licensing expense passed directly to subscribers.
In her memo, Sharma divided the challenge into two timeframes: a near-term problem of affordability that demands a better value equation, and a longer-term ambition to build something more flexible — though she cautioned that meaningful change would require time and experimentation. She took the Xbox role following Phil Spencer's retirement, arriving with a stated commitment to recapture the brand's spirit of surprise and boldness.
That vision now faces a concrete test. Reports suggest Microsoft may consolidate Game Pass tiers further in 2026, a move that could raise costs for users who already feel overcharged. Sharma's acknowledgment that the current model is not permanent is an implicit admission that the service needs rethinking at its foundation — not just at the margins. Whether that rethinking arrives quickly enough to restore subscriber confidence may well define her leadership.
Asha Sharma, the newly installed head of Xbox, has conceded what players have been saying for months: Game Pass costs too much. The admission came in a memo to staff that leaked to The Verge this week, a candid acknowledgment from leadership that the subscription service has priced itself beyond what many gamers are willing to pay.
The timing of Sharma's confession is pointed. Last October, Microsoft raised Game Pass Ultimate from $19.99 to $29.99 per month—a fifty percent jump. The company also eliminated the option to buy an annual subscription at a discount, forcing users into month-to-month commitments at the higher rate. The Verge reported that one driver of the increase was Microsoft's decision to add Call of Duty to the service ahead of Black Ops 7's November launch, a licensing cost that got passed directly to subscribers.
In her memo, Sharma framed the problem with unusual directness. "Game Pass is central to gaming value on Xbox," she wrote. "It's also clear that the current model isn't the final one." She split the challenge into two horizons: the immediate term, where the service has become unaffordable and needs a "better value equation," and the long term, where Microsoft plans to build something more flexible—though she cautioned that testing and learning would take time.
Sharma took over the Xbox CEO role after Phil Spencer's retirement earlier this year. She arrived with a stated mission to return the brand to its founding spirit, emphasizing surprise and willingness to attempt what competitors wouldn't. That philosophy now faces a practical test: how to restore faith in a subscription service that has become a symbol of price creep rather than value.
The problem is compounded by what's coming. In February, reporting suggested Microsoft was considering merging Game Pass Premium and PC Game Pass into a single tier, a consolidation that could force some users to pay more each month for access they already have. The company has not confirmed these plans, but the possibility hangs over any pricing conversation.
What Sharma's memo reveals is that Xbox leadership understands the bind they're in. Game Pass was built on the promise of access—hundreds of games for a monthly fee, a Netflix model for gaming. But as licensing costs have climbed and the service has matured, that promise has become harder to keep at a price players accept. Sharma's acknowledgment that "the current model isn't the final one" is an implicit confession that the path forward requires rethinking, not just tweaking. Whether that rethinking happens fast enough to win back trust is the question that will define her tenure.
Citas Notables
Game Pass is central to gaming value on Xbox. It's also clear that the current model isn't the final one.— Asha Sharma, Xbox CEO, in leaked memo to employees
Short term, Game Pass has become too expensive for players, so we need a better value equation. Long term, we will evolve Game Pass into a more flexible system.— Asha Sharma, Xbox CEO
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Why would a CEO leak a memo admitting their own service is too expensive? Doesn't that undermine the pricing?
It wasn't intentionally leaked—The Verge obtained it. But the fact that Sharma wrote it at all suggests she knows the damage is real and that silence would be worse. Players already feel the price hike. Acknowledging it gives her room to move.
So this is damage control?
It's more than that. She's signaling to employees and investors that she sees the problem and has a plan. If she'd stayed quiet, the narrative would be that Xbox doesn't care. Instead, she's saying: we know, we're working on it.
But she also says it will "take time to test and learn." That sounds like nothing will change soon.
Right. She's being honest about the timeline. A quick fix would be a price cut, but that costs money and might not solve the underlying problem—which is that licensing costs are too high. A real solution requires building a different model, and that takes experimentation.
What about the rumor that they're merging the PC and Premium tiers? That would make things worse, not better.
That's the contradiction at the heart of this. Sharma is saying the service is too expensive while the company is apparently considering a move that would make it more expensive for some users. Either the merger doesn't happen, or her credibility takes a hit.
Is there any way this works out for Microsoft?
Only if they actually deliver on the "more flexible system" promise. If they introduce cheaper tiers, or a free tier with ads, or some way to pay less for fewer games, then the memo becomes the turning point. If nothing changes, it's just words.