When Microsoft raised the price of Xbox Game Pass Ultimate in Australia to $35.99 a month, it sparked an immediate backlash from players frustrated by what many see as corporate overreach. As TechRadar reported, Xbox’s own communications director Dustin Blackwell admitted that “price hikes are never fun for anybody,” while insisting the company is adding more value to each tier.
That explanation hasn’t landed well, and now fans are cancelling in large numbers, and online communities are filled with anger over the 50% increase in Australia. This is more than a pricing tweak, it’s a sign that Microsoft is leaning too heavily on Game Pass to keep its gaming arm profitable.
Microsoft’s recent financial results tell the story. Hardware sales for Xbox fell by more than 20% year-on-year, while software and services revenue grew mainly because of subscriptions. Game Pass alone brought in nearly five billion US dollars last year, making it one of the company’s biggest earners.
But internal estimates suggest that adding major titles to Game Pass, such as Call of Duty: Black Ops 6, could cost Microsoft hundreds of millions in lost direct sales. In other words, the more people use the service, the less they buy games outright. The new pricing model feels like an attempt to plug that hole.
What It Means for Australian Players
At $35.99 a month, Australian subscribers will pay over $430 a year for Game Pass Ultimate. That’s roughly the cost of five full-price games or even a budget console like the Series S when it launched. The cheaper PC tier remains at $19.45 a month, but it offers fewer benefits and no console access.
For local gamers already facing rising costs across electricity, groceries, and streaming services, this hike is a hard sell. It feels like loyalty is being punished rather than rewarded. Microsoft has also restricted day-one access to new releases to the most expensive tier, which further erodes the value of its cheaper plans.
Microsoft’s strategy seems built on one assumption, that every gamer wants to live inside Game Pass. But that ignores the emotional appeal of owning a physical game, displaying a collection, and trading or gifting titles. With fewer exclusive releases and a declining retail presence, Xbox has tied its identity almost entirely to a subscription service.
Relying so much on Game Pass is risky. Subscription fatigue is setting in across entertainment platforms, and consumers are starting to push back. The backlash over this price rise shows just how thin the goodwill has become.
If Microsoft wants to rebuild trust, it needs to treat Game Pass like an option, not an obligation. This means offering real incentives for long-time subscribers, clearer tier structures, and more competitive regional pricing. Most importantly, Xbox needs fresh, exclusive games that make owning the console feel special again.
Game Pass was once Xbox’s biggest strength. Right now, it’s beginning to look like a crutch. Unless Microsoft balances its focus between subscriptions and traditional sales, it may find that the future it’s betting on is one that players no longer want to buy into.
