Sharma’s Game Pass Cut Leaves Last Year’s Hike Half Done

Xbox CEO Asha Sharma told staff that Game Pass sign-ups and retention improved after April’s price cut, a partial rollback of last year’s 50% hike. Ultimate now costs $22.99 a month, $7 below the October 2025 peak and still $3 above the $19.99 plan that price replaced.

She called the shift a good first step toward durable growth. The rest of 2026 showed why she also said Xbox would have to outwork the problem: delayed Call of Duty launches, a 3,200-person reset, and a November cap on cloud hours.

The 50% Hike That Emptied Game Pass

On October 1, 2025, Microsoft moved Game Pass Ultimate from $19.99 to $29.99 a month, a 50% jump that added $10 a month and $120 a year. PC Game Pass rose from $11.99 to $16.49. New buyers paid the new rates that day; people already on the service were moved on November 4.

The hike landed on top of an earlier step. In July 2024, Ultimate had already gone from $16.99 to $19.99. The October overhaul also renamed the cheaper rungs, with Core becoming Essential at $9.99 and Standard becoming Premium at $14.99 in the U.S., while stacking Fortnite Crew, Ubisoft+ Classics, extra day-one games, and cloud perks onto the top tier to justify the new ceiling.

Xbox Chief Strategy Officer Matthew Ball later said the company “shed millions of subscribers over the span of a few months” after that increase. Sharma, who became CEO in February 2026, put the same diagnosis in blunter internal language: growth slowed and subscriber loss accelerated after the pricing and SKU changes.

GAME PASS ULTIMATE, MONTH BY MONTH

A $7 cut sounds large until it is set against that ladder. $22.99 is 23% below the peak and 15% above the plan Xbox sold for most of 2025. Public companies almost never reverse a price like that, which is why the April move felt bigger than the remaining $3 gap. The remaining $3 is still a $36-a-year premium over the old Ultimate bill.

April’s Cut Came With a Call of Duty Delay

Eight days after Sharma told staff that Game Pass had become too expensive for players, Xbox dropped Ultimate to $22.99 a month and cut PC Game Pass to $13.99. The same post pulled future Call of Duty releases off launch day.

New CoD games will join Ultimate and PC Game Pass in the following holiday season, about a year after they ship. Titles already in the library stay. Ultimate keepers still get hundreds of console and PC games, in-game benefits, online multiplayer, and other day-one releases. At the moment that post went up, they also still had unlimited cloud gaming.

WHAT APRIL 21 ACTUALLY CHANGED

• The top price: Ultimate fell $7 to $22.99 and PC Game Pass fell $2.50 to $13.99, with regional rates still in play.
• Call of Duty: Future entries skip launch day on Ultimate and PC Game Pass and arrive about a year later.
• Cloud, for a while: The April note still advertised unlimited Xbox Cloud Gaming; that promise did not survive September.
• The cheaper rungs: Essential and Premium stayed at $9.99 and $14.99 in the U.S. on the current Game Pass plan comparison.

Xbox framed the package as a reply to player feedback, not as a retreat from last year’s SKU redesign. The CoD delay was the part people priced immediately. A cheaper sub that no longer carries the biggest annual shooter on day one is a different product, even if the rate card looks friendlier.

Sharma Calls the Bounce a First Step

In a late-May memo, Sharma said that since the price reduction Xbox had seen acquisitions grow and retention improve. She called that a good first step, then warned that one moment or one launch would not solve it. “We will have to outwork the problem in front of us in our path to restore durable growth,” she wrote.

At Fortune Conversations in June she was more specific. Xbox had raised prices 50% last year and was on a path to subscriber decay, she said, and the service had become too unaffordable, so the team adjusted the price. “We’re starting to see more subscribers, we’re starting to see more importantly better retention, and we’ve got more work to do.” She added that Xbox would do more that summer to create more flexible offerings.

The April 13 memo had already sketched the longer plan. Game Pass is central to gaming value on Xbox, she wrote, and the current model is not the final one. Short term, the service had become too expensive, so Xbox needed a better value equation. Long term, it would evolve Game Pass into a more flexible system, which would take time to test and learn around.

That is a CEO describing a wound she did not inflict and a bandage she does not think is finished. The May bounce is real in her telling. It is also the opening of a repair job, not the end of one.

30 Million Members Against a 77 Million Target

Microsoft’s last official Game Pass figure is 34 million members, given in February 2024 by then-Xbox president Sarah Bond. A person familiar with the membership numbers put the service around 30 million in July 2026, about 4 million and roughly 12% below that mark. Phil Spencer had claimed 25 million members in January 2022, so the official line of the service still ends in 2024.

GAME PASS SCALE, AS DISCLOSED

• Last official count: 34 million members in February 2024, after Xbox Live Gold users were folded in.
• July 2026 read: Around 30 million, according to a person familiar with the figures, after Ball’s “millions” of losses.
• 2026 plan: 77 million members in documents from the Activision Blizzard review, a target around 30 million would meet at 39%.
• The money: Game Pass brought in nearly $5 billion in fiscal 2025 even as paid membership stopped being published.

Documents from that same Activision review also pointed at 100 million paid members by 2030. Around 30 million is less than half the 2026 plan and a long walk from that later number. The shortfall is the hole studio leaders already fighting Game Pass math have been staring at, because a smaller paying base makes every day-one game more expensive to give away.

Microsoft’s own books did not treat April as a revenue rescue. On the July 29 earnings report, Xbox content and services revenue was down 10% and hardware was down 13%. Satya Nadella said the company was making the decisions required to reset the business and expected to return it to growth in fiscal 2027.

Why the Job Cuts Still Arrived

If the May memo was the first checkpoint, July 6 was the bill. Sharma told staff Xbox was beginning the most significant restructure in its history, with about 3,200 roles gone through fiscal 2027, including about 1,600 that day, and four studios leaving. Those cuts became the 3,200-job Xbox reset she later ordered, after she had already cut the Game Pass price and killed Copilot for Gaming.

To grow, we bet on Game Pass, multi-platform, and a broader portfolio of content. While those businesses have created meaningful value, they did not grow at the pace we expected. As that happened, our core business weakened, and we added more teams, more investment, and more time, hoping for a better outcome.

Asha Sharma, Xbox CEO, July 6, 2026 staff memo

She wrote that Xbox was running at margins 3 to 10 times lower than comparable platform and publishing businesses, and that in a typical year the company lost 64 cents for every dollar it invested in the expanded studio bet. Compulsion Games and Double Fine are going independent. Ninja Theory and Undead Labs are moving to new owners with funding to finish Senua and State of Decay 3. About 20% of Xbox jobs are slated to go by July 2027. Microsoft cut 4,800 jobs company-wide that day, and more than 30% of those losses sat in Xbox.

THE YEAR XBOX WALKED THE PRICE BACK

1. October 1, 2025: Ultimate jumps to $29.99 and PC Game Pass to $16.49; Essential and Premium take the old Core and Standard names.
2. April 13, 2026: Sharma tells staff Game Pass has become too expensive and that the model is not final.
3. April 21, 2026: Ultimate falls to $22.99; future Call of Duty titles leave day one.
4. May 11, 2026: Discord Nitro adds a Game Pass starter edition.
5. Late May 2026: Sharma says sign-ups and retention have improved and calls it a first step.
6. June 8, 2026: Ball says Xbox shed millions of subscribers in the months after the hike.
7. July 6, 2026: Sharma announces 3,200 cuts and says the Game Pass bet did not grow at the expected pace.
8. September 3, 2026: Xbox posts monthly caps on Game Pass cloud hours, starting in November.

The May bounce and the July reset can both be true. New sign-ups can tick up at $22.99 while the wider Game Pass bet still misses the scale it was built for. Sharma’s own memo treated them as the same story: a service that created value, then failed to grow fast enough, then had to be made cheaper, then had to be cut around.

Cloud Play Drops to 15 Hours in November

April’s price post still sold unlimited cloud. On September 3, Xbox said that from November Game Pass plans will include a set number of cloud hours: Ultimate gets 15 hours, Premium 10, Essential 5. Extra time will be sold in the Xbox Store. Xbox expects the change to hit 4% of subscribers and said the cost of cloud grows as more people use it and play longer.

CLOUD HOURS FROM NOVEMBER

• Ultimate: 15 hours a month, about 30 minutes a day if you spread it across a 30-day month, down from unlimited.
• Premium: 10 hours a month, about 20 minutes a day, with extra hours sold separately.
• Essential: 5 hours a month, with the same paid top-up path and market-by-market details still to come.

Xbox will also let people buy cloud hours without a Game Pass sub, including a path for Xbox One owners to stream eligible Series games. The company said the practical result for some players is a higher cost. For anyone who took the April cut as a full restoration of value, the 15 hours of cloud play a month cap is the next subtraction: cheaper membership, metered streaming, and Call of Duty a year late.

A Starter Catalog Inside Discord Nitro

The other May experiment was distribution, not price. On May 11, Xbox and Discord put a starter edition of Game Pass inside Nitro where it is available, with more than 50 PC and console games and 10 hours of cloud a month. Stardew Valley, Grounded, Hades, Fallout 4, and Doom Eternal were among the named titles. Nitro’s price did not change.

Discord senior director of product Lu Zhang said the company was launching Nitro Rewards with Xbox as a flagship partner, giving members gaming services and gear beyond the chat app. Eligible Game Pass subscribers were promised Discord perks later that month: 250 Orbs, 1.2 times more Orbs on Quests, and automatic shop discounts. Discord also added a Play button that can send someone from a friend’s activity into Game Pass.

The Nitro Rewards starter Game Pass bundle is the flexible system Sharma keeps previewing, in miniature: a thinner catalog, a cloud meter already set at 10 hours, and a way to pick up members who already pay someone else. Ultimate at $22.99 is still the expensive product in that stack. The starter tier is how Xbox tests whether a smaller Game Pass can travel.

Sharma has not put Ultimate back at $19.99, and she has not claimed durable growth is back. She has a bounce in sign-ups, a rate card that is still $36 a year above the old one, a shooter delayed by a holiday season, and a cloud meter arriving in November. That is the problem she said Xbox would have to outwork.