Microsoft is raising the price of Xbox Live Gold from $60 per year to $60 every six months. It included some caveats to that, and this increased fee doesn’t even affect Xbox Game Pass Ultimate subscribers. But it still seems like a miscalculation from a company that so often emphasizes value.
Xbox Live Gold already feels like an outdated, legacy product. It is the premium online service for Xbox consoles. And anyone wanting to play any online games on Xbox 360, Xbox One, or Xbox Series X/S must have an active Xbox Live Gold membership. The service also includes other perks like Games With Gold where players can add games to their library at no additional cost. As long as you have a Gold subscription, you continue to get access to those games.
And now players will need to pay more for Xbox Live Gold.
“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,” reads an Xbox news blog. “You can always visit your account to manage your membership, and prices won’t adjust until at least 45 days after you receive the messages.”
But about those caveats.
Microsoft is not raising the price if you’re an existing 12-month or 6-month Xbox Live Gold subscriber and choose to renew. But even that is something of a stealth price-hike for many people. While you can renew your 12-month Gold membership through Xbox for the grandfathered price of $60, a lot of people prefer to look for discounts from third-party retailers. They often end up paying less than $60 per month by getting a 12-month Gold gift card from Amazon.
Wit this new pricing structure, it’s unlikely that those Gold members would find similar deals going forward.
What is Microsoft doing with Xbox Live Gold?
A lot of smart people work at Microsoft. These decision-makers have access to a lot of data and analytics, and they use this info to help them guide Xbox as a platform. So, what is the thinking behind the decision to double the price of Xbox Live Gold?
The simplest explanation is this will make Microsoft more money, right? Maybe. But the problem is that this seems like an extremely bad deal compared to Xbox Game Pass Ultimate, which includes Gold, at $15 per month.
Or is that a problem? Maybe it’s the point.
The other simplest explanation here is that Microsoft thinks Game Pass Ultimate look better because Xbox Live Gold is now a worse deal. But those kinds of comparisons don’t exist in a vacuum. Sure, Game Pass Ultimate does look more enticing relative to Xbox Live Gold now, but the more glaring comparison is between Xbox’s online service and similar services on PlayStation, Nintendo Switch, and PC.
Did you know that you still need an Xbox Live Gold subscription to play online with free games like Fortnite and Call of Duty: Warzone on Xbox? That was true before the price hike, and it’s still true now. That stands in stark contrast to PlayStation, Nintendo, and Windows, where you can play free games with no premium membership.
So if someone wants to get a console to play Fortnite with friends, they’d end up paying $420 for the less powerful Xbox Series S in the first year. Where they would only pay $400 for the digital version of a fully next-gen PS5.
An obvious marketing trick
Microsoft, of course, offered its own reasoning for the Xbox Live Gold increase. In its blog post, it essentially said “it’s time to pay more.”
“Periodically, we assess the value and pricing of our services to reflect changes in regional marketplaces and to continue to invest in the Xbox community,” reads the blog. “We’ll be making price adjustments for Xbox Live Gold in select markets. In many markets, the price of Xbox Live Gold has not changed for years, and in some markets, it hasn’t changed for over 10 years.”
But it is no secret that Xbox’s focus is on Game Pass. More than anything, Microsoft wants people to subscribe to its all-inclusive “Netflix of gaming.”
That’s what makes the Xbox Live Gold increase feel like such an obvious trick. Microsoft doesn’t care if we all complain that it’s too expensive, because it thinks we’ll either pay the price or move to Game Pass instead.
But it ruins the effectiveness of the trick when we all so clearly see Microsoft’s motivation.
People love to think they’re getting a deal. Company’s take advantage of this quirk all the time. It’s why we feel like we’re getting away with something when we paid just 25 cents more for a large popcorn versus a medium at the movie theater even though we still paid $15.
Microsoft itself leverages this idea by letting people turn their Xbox Live Gold subscription into Xbox Game Pass Ultimate for $1. People rushed out to buy three years of Xbox Live Gold and gushed about the fantastic bargain … after they just gave Microsoft $181.
But more people can see through Xbox Live Gold price hike. We know we’re being manipulated. and that breaks the spell. So going to Game Pass Ultimate simply doesn’t feel like getting a similar bargain.
Author: Jeff Grubb
Source: Venturebeat
