(UPDATE) Well, that was really much ado about nothing as Microsoft has backtracked the price hike, and they also removed the requirement to have Xbox Live Gold to play free-to-play titles. A win-win for consumers and all it took was massive backlash from the gaming community.
Here is the update from Xbox wire:
“We messed up today and you were right to let us know. Connecting and playing with friends is a vital part of gaming and we failed to meet the expectations of players who count on it every day. As a result, we have decided not to change Xbox Live Gold pricing.
We’re turning this moment into an opportunity to bring Xbox Live more in line with how we see the player at the center of their experience. For free-to-play games, you will no longer need an Xbox Live Gold membership to play those games on Xbox. We are working hard to deliver this change as soon as possible in the coming months.
If you are an Xbox Live Gold member already, you stay at your current price for renewal. New and existing members can continue to enjoy Xbox Live Gold for the same prices they pay today. In the US, $9.99 for 1-month, $24.99 for 3-months, $39.99 for 6-months and $59.99 for retail 12-months.
My how the conversation changes. Just a few months ago we heard rumors of Xbox Live Gold going away completely to usher in Game Pass as the ultimate subscription for the Xbox ecosystem. Tying the two together certainly made sense to increase the number of monthly active users to the service while also streamlining their list of Xbox services. Now, Microsoft has confirmed that the price of Xbox Live Gold will be increasing in price.
Jump to the bottom of this page for exactly how this will impact you.
As expressed early on in their blog post, there hasn’t been a price-hike for the service in 10 years. So, you could anticipate that there would be a price hike sooner or later, but they really bungled their communication of the price hike.
Price hikes to subscriptions are nothing new. In a world where it’s not rare to have 5+ subscriptions to various forms of media, it’s become commonplace to anticipate price hikes. However, every price hike to those other services, be it Disney+, Netflix or YouTube TV, comes with some grain of not screwing over the consumer or, at least softening the blow with PR spin. Microsoft did neither.
In general, it’s usually a good idea to explain why you are making people pay more for their subscription. The increase could come from an increase in operating costs, a good way to get at the emotional level and attempt to have people realize the value of the service, or maybe they could be adding additional perks to help soften the blow of an increased cost. What Microsoft did was use the strong-arm of exclusivity to their platform to force adoption of the increased price hike, or to force them into a service they might not fully utilize in Game Pass Ultimate.
What Microsoft should have done
Since Microsoft clearly wants to pump up their MAU numbers, there are a handful of ways Microsoft could have still done that, while not having the worst optics and destroying any goodwill they built up leading into the generation.
- Remove the barrier of forcing users to have Gold to play free to play games online. When you are the only platform that charges its users to play F2P games, there is a good chance you are in the wrong. The barrier needs to go.
- Wait. We are still in the midst of a pandemic that has impacted millions of people financially and you just released a next-gen console. There is no reason to force adoption of a higher price in this climate.
- Lower the price of Gold. Yes. Lower. Microsoft’s push with Game Pass Ultimate clearly shows that they want that to be the main service they provide, but that service doesn’t fit into every gamer’s lifestyle. Why force adoption? By lowering Gold, you 1) keep the customer 2) provide good will and 3) potentially encourage the future adoption of higher tier services (like GPU) due to less friction or fear of a price hike for that service.
This doesn’t really have the inherent feel of Microsoft hoping the service is more of a money driver than it already is. If anything, it feels like a tactic to push people onto GPU. The service is outstanding and great for me, but I could see where that doesn’t make sense for a lot of gamers. The potential revenue gain aside, if Microsoft was looking for the quickest way to burn goodwill, they’ve certainly found it.
From the Microsoft blog post: Update on Xbox Live Gold Pricing – Xbox Wire
“So, what does this mean for you?
- If you’re an existing online 12-month or 6-month Xbox Live Gold member, there’s no price change. If you choose to renew your membership, it will renew at your current price.
- The price of a 1-month Gold membership is increasing $1 USD and the price of a 3-month membership is increasing $5 USD or the equivalent amount in your local market.
- If you’d like to upgrade your Gold membership to Xbox Game Pass Ultimate your remaining Gold time will also convert directly to Ultimate (up to 36 months). For example, if you have 11 months of Xbox Live Gold now, and you upgrade to Xbox Game Pass Ultimate, those 11 months convert to 11 months of Ultimate at no additional cost.
Going forward, new pricing will be 1-month for $10.99, 3-months for $29.99, and 6-months for $59.99, or your local market equivalent.”