Xbox CEO Asha Sharma has acknowledged that the $30 price increase for Xbox Game Pass Ultimate caused subscriber growth to slow down and loss to accelerate, demonstrating that subscription pricing strategies must balance revenue goals with customer retention; the company is now implementing corrective measures including reducing the price to $22.99 and removing Call of Duty from the service to restore subscriber base and achieve durable growth.
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XBOX Internal MEMO from ASHA SHARMA | XBOX Has HARD DECISIONS | Call of Duty MW4 AnnouncedAdded:
An internal memo has been obtained, and Asha Sharma has some interesting things to say about Xbox, the future, and decisions that have to be made. We got the official announcement for Call of Duty: Modern Warfare 4. We were just talking about this yesterday, and we were seeing the leaks. We were seeing the stuff that people had been talking about. We got the official announcement here with lots of information surrounding the game, including multiplayer, gameplay improvements and changes, and the release date, and where the game is going to be releasing. And the Steam Machine, I said yesterday that the price is going to be affected. It's not going to be very good, and you can see what's happening within the market and hardware, as well as what's happening with the Steam Deck getting a price raise. We have an interesting article as to where they got the price internally. How will that translate to when it does eventually come out for the customers. Before we do get into it, if you do enjoy daily gaming news and Xbox news, make sure to hit the subscribe, share the video, like it. It really does help the channel out. And if you've been watching for a while, which I see many of you have been, make sure to hit the subscribe button. But for now, let's get into it.
So, Asha Sharma has been CEO at Xbox for over 2 months now, and she has done a lot of things in that short period of time, or at least it seems like she has, because there's been constant updates coming out about Xbox. She's done a major change, like with Xbox Game Pass Ultimate, reducing the price and pulling Call of Duty out of the service. Talked about multiple times focusing on the core customers, the console customers, and I think she's backing that up with the bi-weekly updates to the console that are going to be coming out now until the end of the year. So, as of today, she is backing up what she is saying, and I think she's also done a very good job, which I think was one of her strengths before taking over at CEO, at PR-ing things in a better way. The brand image is slowly getting better for for the people that it had deteriorated for when they started doing all their other business changes like putting games onto the PlayStation 5. And there's still a lot of work to do on that front. Xbox has a ecosystem as a place to play video games. It's it's phenomenal still. A lot of people still like to be down on Xbox for some reason when it comes to the game side. I think they've done a very, very good job, and that's not really what she's done because that's been in the works now for years. But there's other places like the image and the marketing and how they're going to adjust things going forward with their subscriptions and everything that is going to be her biggest challenge. Now we have an internal memo that was obtained here by The Verge, where she does mention some very, very interesting things, specifically when it comes to Xbox Game Pass and then the future.
Makes you start thinking what challenges and what changes and decisions are going to be made. But here is the statements that were pulled from this memo.
First of all, when it comes to Xbox Game Pass, she says its growth slowed down and subscriber loss accelerated after the pricing and skew changes last year.
Since our price reduction, we have been seeing acquisitions grow and retention improve, which is a good first step. So she's obviously talking about the price raise to $30 when it came to Xbox Game Pass. Now, when that did happen, it was obvious that there was a lot of outrage around the price going up to $30, and a lot of people were saying they were leaving Game Pass, they weren't coming back, and it seemed like there was this mass exodus of Game Pass subscribers. I don't know if that matches exactly from what we we seen from their financial report, but when that was happening, my prediction was you're going to see a lot of people leave Game Pass Ultimate or downgrade to Xbox Game Pass Premium, but according to her, that is that is basically exactly what happened, which was subscriber loss was accelerated, and then they were trying to get changes here, make changes by taking out Call of Duty, and then reducing the price to retain customers for a longer period of time. So, that's what it seems like she's saying is happening now with the current price of Xbox Game Pass Ultimate at $22.99, which is probably the sweet spot for a lot of people as the most amount that they would end up paying for the subscription service.
But will that be enough? Will that be something here that they are okay with and they just leave it the same going forward, or are they going to have to make more changes to Xbox Game Pass? It mentions here, "Interestingly, I believe this is the first time we've received confirmation that the Game Pass price hike did cause a slow down in growth and loss of subscribers, or at least the first time I've personally seen someone at Xbox directly acknowledge it." And she also does point out here that as there's a small win, but it's a small from a complete turnaround when it comes to actually getting the Game Pass subscribers back with the change. She says, "We will not solve this in one moment or one launch.
We will have to outwork the problem in front of us in our path to restore durable growth." And also noted that this team still needs to build and learn quickly. So, the price reduction hasn't solved everything. It's going to take a while because there's probably some people out there that still don't even know the price did go down, which is kind of the craziest part about that all. And there are people that were subscribed to Game Pass Ultimate for Call of Duty, a small number, I think, cuz if you're only playing Call of Duty, it doesn't make any sense to subscribe, but maybe it was a major reason why they subscribed while playing other things.
And now that they've pulled Call Call Duty out, they may be even lost some people by taking that game out of the service, but it does sound like that move has moved the needle in a positive direction.
We'll never know the numbers, we'll never know just how many people left, we'll never know any of those things, but like I said, when we take a look at the financial reports, the services and and side of Xbox, it was down slightly last quarter, but the previous quarter, I think it was like even or maybe up 1%, so I don't know if it shows exactly that when you're looking at that side of things, but of course, raising the price to $30, you saw the reaction. They were going to lose subscribers. I think what they were betting on was people would downgrade to premium, and then the people that stayed on Ultimate at the $30 would offset the amount of people who left at the previous price range, but clearly, that's not what they're looking for here. They want to grow the subscriber numbers. They've talked about daily active users, and the way to do that is to keep people locked in to Game Pass and into your ecosystem.
Now, the other thing here, this is where things get interesting because we've talked about this the whole debate going online right now.
Exclusives and what's what's what is crazy to me, especially from what we are seeing right now with the whole hardware space is there's still people that believe console exclusives is the way to go, even though I don't think consoles are growing, and I don't think they will grow with exclusives or without going into next gen, simply because it's going to price out so many people with how expensive the consoles are becoming, but it is a debate, console exclusives or day one on Xbox Game Pass. And this is interesting because it does point towards maybe they're looking at some things here, and some more changes are going to be coming.
Says here, this is what Ashley Scharma says, "We are building a stronger Xbox.
That means making hard choices about what we build, where we invest, and what kind of company we need to be going forward. That is part of what you are starting to see in the shift from Xbox to Xbox, which is just the way that it's written.
It reflects a decision to be deliberate in how we show up for the players who care most about this brand. And then says here that as a fan, it'll be interesting to see how this all unfolds and they're also quite curious about the hard choices that Sharma believes Xbox needs to make, whether that means more exclusives heading to other platforms, bigger changes to Game Pass, or something else entirely. So, this is a part of the a leaked memo. The hard choices thing, who knows exactly what that means. I mean, there's so many things you could think about as to exactly what Xbox is going to do with that going forward, whether that means pulling back their games from certain places or even expanding their games out to other places. You have people hinting here that oh, this may mean that layoffs are coming. She's kind of getting people ready for that. We don't know, but I'm sure we will learn more about this by the end of this year, whatever decisions that they are making, because they need to prepare for Project Helix. I don't think they can put Project Helix out without having a clear direction from her perspective as to where Xbox should go from here, now that she is the CEO.
So, we could hear about things sooner rather than later.
My prediction is, as I've said multiple times on this channel, is if they're going to make any major changes and they're really talking about focusing on the core fans and talking about focusing on the console players, they're not going to take day one exclusives off of Xbox Game Pass. If anything, they're potentially going to pull back from putting games onto PlayStation 5 and then go back to the strategy that I think was the correct strategy, which was putting games wherever Game Pass exists, because it still gives tons of access to those games and it does not hurt the brand image, like putting Halo onto PlayStation 5, which you you see the reactions online, a lot of people were upset with that. So, I think they'll do something like that and then potentially do things like change the tiers of Game Pass or giving you more options in what you want with your subscription service, an ala carte style of service. Like if you want Call of Duty in it, you can actually add that on and then hopefully they go down to the lowest tier of Game Pass, they slash the multiplayer fee and then provide more value to make up for that so that you're not having to pay online going forward when Project Helix does end up dropping.
So, lots of things. That's my prediction. We'll see what actually does happen when Ash Sharma does make some more calls on the future of Xbox. The other thing that she has been doing that Xbox has done is changing up the logos, the coloring, and now they're bringing this over to Xbox Game Pass. This is just nice little quick thing here, but the green is now the logo. It's not the white anymore. And I like this. I like this. If you actually go onto your phone and you go to the app, the logo has changed on that, too. It is the green Xbox. Oh, however, when I clicked on it, after you click on it, the Xbox logo and everything else is still the old one.
So, they got to still go in there and change that, but they're now bringing this logo over to the official Xbox Game Pass logo, which is great to see. So, that was a bunch of stuff when it comes to the business side of Xbox. The other major thing that happened yesterday was Call of Duty: Modern Warfare 4 was officially announced, something we've known for a very long time that it was coming and that this was going to be the next game in the series. And they gave the official announcement.
I'm interested in it. I mean, I'm kind of a little run dry from Call of Duty, but I will play the campaign at the very least unless it's like as bad as Black Ops 7's campaign was or Modern Warfare 3's campaign was, which I didn't find very good. But if they give us a nice, good, story-driven, linear campaign with different multiple missions and and and just basically giving you multiplayer maps to go in there and collect things, then I'll probably jump in there and play it. But we got the official announcement here from Call of Duty and we got the release date of it, which I think potentially can clear up some other release dates on Xbox's side of things. But Call of Duty: Modern Warfare 4 arrives October 23rd.
Wherein you're going to be able to get into this, and they say it's a campaign with war erupting on the Korean Peninsula threatening to destabilize the world. Multiplayer featuring grounded, precise combat with fluid movement. DMZ, a living world where every deployment is a new story. And then you can get some more details by going over to their blog. Now, specifically when it does come to the multiplayer, this is some interesting stuff here. So, there will be no omni movements in this year's Call of Duty. Infinity Ward says Modern Warfare can be different from Black Ops.
There are slide canceling, slide to ADS, tax sprint, but now they say realistic as you see your character lose stamina, which is interesting. They're they're definitely making that more realistic.
You can if you're going to be able to feel that better.
Uh supine slide, dive into backwards prone, mantling keeps guns up, ledge hang, operator reacts to environments, your weapon angles as you approach walls, doors, etc. And you can climb up on poles, jump from ladders to windows, and more. So, that is just some information on the actual gameplay side of things when it does come to the multiplayer. They're doing some other stuff here, which I think is good.
And this year is one of them.
It is a loyalty discount. Now, it's only 10%, but it's better than nothing, I think. And I would like to see that maybe a little bit higher, but they're offering a loyalty discount for previous players of Call of Duty. They say if you purchased Call of Duty games since Modern Warfare 2019, or if you played it via Game Pass, which is nice, that's smart that they're adding that into the subscription service. They're not taking that stuff out of it. They're still giving you those perks for being subscribed to Xbox Game Pass. And they say you can get a 10% discount off of the Modern Warfare 4 Vault Edition for that loyalty. In addition note, if you played Call of Duty from MW 2019 to Black Ops 7 and purchased it claim one via PlayStation Plus monthly title played Xbox Game Pass, you're also eligible for the 10% pre-order. The other thing here, if you're wondering where this game is releasing, it is everywhere. It's coming out on the Nintendo Switch 2. This is the first time there's been a Call of Duty game I think since Ghosts on the Nintendo Wii U.
So, they're finally giving Nintendo Call of Duty living up to the deal they made with ABK. And it's going to be full cross-play. The Switch 2, I love my Switch 2. I play it all the time. It is obviously underpowered comparatively to the current Xbox Series X, the S, and the PlayStation 5 and PS5 Pro, but with the technology in there, with the Nvidia chip and the DLSS and whatever magic they're using, games run pretty good for a console of that power, especially even in handheld mode. So, I think it'll be popular there because you're going to be able to take this game with you on the go and play multiplayer all the time wherever you are on the Nintendo Switch 2. So, cool stuff there. Full cross-play, everything is in there in the Switch 2 version. It's not a standalone version. If you do recall back in like the 360, Nintendo Wii, and the PS3 days, the Nintendo Wii had its own version of the game. It wasn't the exact same for between the Xbox 360 and the PS3.
So, now this time around, obviously, all the games are the exact same.
Finally, there is a little bit more here on the actual campaign here from Shinobi who summed it up that as I said, takes place in the Korean Peninsula as North Korea launches invasion into South.
Features young squad of South Korean soldiers. Captain Price wages a personal war from the shadows against those hunting him. There's trench warfare in Korea, close quarters combat in New York, high octane chases through Paris, the SAS night raids in Mumbai, and the multiplayer's grounded precise combat fluid movement and player choice with greater control. I don't know about you, but story line, setting, that sounds very cool to me.
So, I will absolutely be at least playing the single player. And I always jump into some multiplayer, but I never have enough to put into the multiplayer to really get good at it. So, but I'll jump in and I'll I'll have some fun for a decent amount of time. But there it is, Call of Duty: Modern Warfare 4 October 23rd makes me start thinking, "Okay, now they have Call of Duty launch date locked down. Where do the rest of their game slot in now?" Because they have to plan around Call of Duty releasing as it is an Xbox first-party game, and it will take a lot of attention away from other stuff. To me, I I would say that it probably solidifies Fable moving to December. That's again my guess as to when Fable is going to be coming out.
You're going to have Halo in August, Gears in September, and then you're going to have Call of Duty in October, and then Fable's going to skip November because of Grand Theft Auto and be released in December. That's my prediction as how the rest of these games are going to be dropping.
And finally, the last thing I do want to talk about is Steam Machine. We saw the price raise for the Steam Deck.
A lot of reactions online about that.
It's a pretty absurd price raise. Like it's almost $300 for the OLED, and it's not worth that at all.
The Steam Deck is underpowered now.
Games I I I liked the Steam Deck for a bit, but I always found it didn't run games very good. You really have to tinker and stuff. It's even worse now, and and they're way overpricing the device because of the whole memory shortage and everything that's happening within hardware.
And as we talk about this, and we will continue to talk about how crazy hardware is, it's why I say it makes no sense about locking games to consoles now cuz they're not going to sell more than they previously did with the current prices.
The Steam Machine, I feel at this point, hype, excitement is really falling off because they've taken so long to release it after announcing it last year and saying it was coming in early 2026.
People just know that the price is going to be very, very high. And in fact, the Steam Machine's internal price target had already topped 949 Steam Deck's OLED price 2 months ago.
This is a leaker who's warning about this, so just keep that with a grain of salt, but they say, "Take this with a grain of salt because it was just whispers in my ear, but back when I was told a figure for what Valve's estimated price they'd have to set the starting price of the Steam Machine, it was still higher than today's Steam Deck prices, which the 1 TB OLED is $949.
A $1,000 Steam Machine with the specs under the hood, to me, is probably basically DOA. I don't know how many people are going to spend on that.
It'll sell like maybe very, very niche amount, but over $1,000 for that thing to me is not worth it at all. The only thing that could potentially prop it up is just the Steam fanboyisms that just want Steam everything and they'll go out there and buy, but are there enough people that are on PC that are just such big Steam fanboys that they're going to put buy anything that they do put out. I mean, a lot of PC gamers will look at this and then look at their rig and think is it worth it? There's really no point in me spending $1,000 on this when I'm going to mainly be playing on my high-end PC or my PC, even if it's not high-end, that is more powerful than the Steam Machine. So, we'll see. Hopefully, this was back then and they've been somehow been able to work some magic, maybe subsidize some more, eat some cost, and get that price down. But, right now, I'm not hopeful with what we just saw with the Steam Deck. It to me, if the Steam Deck's that much, it means the Steam Machine's going to be basically around the same.
Maybe even more, as it is newer technology and and newer hardware. So, we'll see what happens here. But, I'm going to end the video there, guys. If you did enjoy this video, hit that thumbs up. If you are new here, hit that subscribe, and I'll catch you guys in the next video.
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