Game Pass price drop is a 'good first step,' CEO says subscribers are up and churn is down after $7 reduction

The Xbox Game Pass price decrease has helped boost subscriber counts and ease churn over a month, but things are still early for the brand's big comeback.

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Derek Strickland

Senior Gaming Editor

Published May 29, 2026 6:36 PM CDT

1 minute & 15 seconds read time

TL;DR: Microsoft's price cut on Xbox Game Pass from $29.99 to $22.99 has reversed subscriber losses and improved retention after a previous price hike hurt growth and hardware sales. Xbox CEO Asha Sharma reports subscriber growth and reduced churn, though exact numbers remain undisclosed.

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Microsoft's plan has tentatively worked, for now: Game Pass numbers have improved since the recent price discount.

Game Pass price drop is a 'good first step,' CEO says subscribers are up and churn is down after $7 reduction 2

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Back in 2025, Microsoft raised the price of Xbox consoles and its Game Pass Ultimate service. This move hurt the brand, deflecting gamers during the critical holiday season and leading to the worst-ever hardware revenues of the entire Xbox Series generation. Game Pass subscribers also fled from the service, opting not to renew.

While we don't know the exact impact--how many subscribers canceled, for instance--Xbox CEO Asha Sharma acknowledged the problem by fixing it with a substantial price decrease. Game Pass dropped from $29.99 to $22.99, and in exchange, players gave up day one Call of Duty launches (Modern Warfare 4 will be the first post-acquisition COD not released onto the service).

Now it's said that the price reduction is working. Game Pass subscribers are up, churn is down, and Xbox remains cautiously optimistic on growth.

The success was acknowledged in a recent in-house memo that was acquired by The Verge, in which Xbox CEO Asha Sharma shares the news:

"Growth slowed down and subscriber loss accelerated after the pricing and SKU changes last year. Since our price reduction we have seen acquisitions grow and retention improve, which is a good first step."

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No actual values were shared, though. Microsoft tends to keep sensitive info close to its chest. The last time Xbox Game Pass subscriber numbers were revealed was back in Q4'2025 when the service had around 35 million paid users.

Xbox Game Pass is now a significant part of Microsoft's games business. The subscription is said to have made nearly $5 billion in revenue in one year, meaning the service would account for double-digit percentages of Xbox's total earnings.

The company has clearly successfully converted users into digital-first subscribers, but the real trick is keeping users paying over time and stopping them from jumping ship to other services.