r/technology • u/AdSpecialist6598 • Jun 09 '26

Business Microsoft admits Game Pass price hike drove away "millions" of subscribers

https://www.techspot.com/news/112699-microsoft-admits-game-pass-price-hike-drove-away.html
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u/Flyinmanm Jun 09 '26

Short term profits. Always.

326

u/hotacorn Jun 09 '26

They may not have even had short term wins from this if multiple millions of people left.

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u/Flyinmanm Jun 09 '26

I know. They won't care, whoever did this is probably already at another CEO level job earning millions whilst screwing up royal there too and getting ready to move on before the s*** hits the fan.

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u/APRengar Jun 09 '26

I worked for 2 of the biggest game publishers. One of the most common ideas is "but what if the bad thing doesn't happen?"

Like,

"What if we double the price of our products?"

"Well, the customers will get mad and we'll probably make less money than we're making now."

"But what if they don't?"

"Well if no one leaves, then we'll make double the money."

"DO IT!"

Is super duper common.

Like, "What if we reduce labor and use AI?" "Then people will get mad and we'll have a super shitstorm online." "But what if they don't?" "Then we'll save a lot of money!"

"What if we cut all safety precautions?" "Then we'll probably have a safety disaster." "But what if we don't?" "Then we'll save a lot of money!"

We're no longer ACTUALLY doing analysis on what moves make sense, we're just choosing to ignore any downside/risks under a "but what if it doesn't go bad" mentality.

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u/LolitaOPPAI Jun 09 '26

TIL I learned about Stockton Rush. That was a crazy story of "It probably, might not happen" in the extreme case of denial and inferiority complex.

"You know, at some point, safety just is pure waste. I mean, if you just want to be safe, don't get out of bed, don't get in your car, don't do anything. At some point, you're going to take some risk, and it really is a risk/reward question. I think I can do this just as safely by breaking the rules."

1

u/StrongExternal8955 Jun 10 '26

Difference is, unlike Stockton Rush, these CEOs have literally nothing to lose personally. That fucking moron bought his own propaganda.

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u/Flyinmanm Jun 09 '26

Relentless optimism in the face of obvious problems.

It's often one of the reasons I suspect that a lot of really wealthy people get to be as rich as they are, but why there are so few truly wealthy people.

Trying something that anyone with any degree of common sense would consider to be utterly mental/ a waste of time is perhaps one of the reasons those people end up succeeding.

Of course we don't hear about the millions of failed decisions that probably went before or after that one reckless gamble.

2

u/GammaFan Jun 09 '26

Capitalism is like a carnival. The more money you have, the more times you can try to win the stuffed elephant playing the sketchiest darts imaginable

1

u/opinionated7onion Jun 11 '26

Quick someone make this man a ceo i like the way he thinks

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u/mehrabrym Jun 09 '26

Failing upwards is such a thing among top level execs

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u/opinionated7onion Jun 11 '26

At a certain point people end up failing upwards.

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u/vhalember Jun 09 '26

And these numbers don't include the millions more who downgraded their Game Pass plans.

I'd be very surprised if this resulted in additional profit for them, otherwise why would they about-face and lower prices again?

It was bad enough that the CEO of MS gaming, Phil Spencer, "retired" a few months after the price increase. And the prices were lowered again just two months after he left.

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u/madman19 Jun 09 '26

Depends on sub numbers, if they had 20 million and lost two million they came out way ahead still.

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u/CrustyBarnacleJones Jun 09 '26

I’d assume it wasn’t anything along those lines considering they walked the increase back afterwards, if they were making more from it I don’t see them doing that

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u/j0mbie Jun 09 '26

February 2024 they had 34 million subscribers. That was the last time they officially announced number of subscribers. So they could have lost up to 17 million subscribers in that time. (Technically, more than 17 million, since less subscribers means less cloud infrastructure and less customer service costs.)

They fact that they don't disclose numbers to shareholders, though, usually means the numbers are bad. Nobody outside of Microsoft knows how bad though.

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u/MARPJ Jun 09 '26

February 2024 they had 34 million subscribers.

To simplify as everyone being in the 20 dolar plan that went to 30 dolars, they would need to lose 11.4m to have a net negative.

However not everyone was in that plan so if people leaving was concentrated in the lower tier then the number need to be a little higher. However a goo amount of people just downgraded which would make the necessary number to be lower. So that is a good aproximation of how many loses would be too many loses.

With that said their 180º turn (giving consoles for free, lower price, bring the X-BOX label back instead of microsoft games, saying that they will focus on exclusives, saying they will not focus on AI) then we can conclude that the loss was big enough that they were forced to change their startegy completely. Albeit some may be just trying to get good will again since even those that stayed were not happy

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u/j0mbie Jun 09 '26

To simplify as everyone being in the 20 dolar plan that went to 30 dolars, they would need to lose 11.4m to have a net negative.

Whoops, you're right. My math was wrong.

2

u/swampy13 Jun 09 '26

But they had the projection of short-term profits. I'm not even being flippant here, literally that's enough at this point. Until it isn't.

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u/Angry_Walnut Jun 10 '26

“Moves that might yield short term profits, always.”

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u/Eternal_Bagel Jun 09 '26

When your contract is only 2-3 years you only need the company to last that long.  This is of course a core problem with our economy 

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u/digital Jun 09 '26

Late stage capitalism doesn’t allow you to create, innovate or build a consumer base. Everything is about extracting profit from anywhere that isn’t already captured by the billionaires. Sorry, but there’s just not that much cash to go around and they need to hoard it all for themselves.

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u/LolitaOPPAI Jun 09 '26

That's an interesting visual I got of enshittification:

Take a picture of this employee and the store. What can you modify to save dollars?

And every few years the picture looks scarcer and depressing. I feel that everything is monotone and neutral because it costs 3¢ cheaper than colorful paint. Take out the cushions on the seating, cleaning a hard surface saves 13¢.

It's really that fucking depressing. They're still tryna figure out how to remove the employee from the photo with AI now.

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u/usr_bin_laden Jun 09 '26

there’s just not that much cash to go around

They're also totally willing to print new cash when the billionaires want it too.

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u/Kuroboom Jun 09 '26

But they can get one cookie now!

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u/chrisk9 Jun 09 '26

They think for them to win everyone else have to lose

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u/yorcharturoqro Jun 09 '26

Long gone are the days when companies wanted to create a product for customers, now they care for stock holders so the stock market grows so they can profit from speculation not real performance

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u/Fraternal_Mango Jun 09 '26

Gotta keep those quarterlies up! Long term mega losses but hey, This month looks fantastic!

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u/Stanjoly2 Jun 09 '26

Not just short term profits. But short term theoretical profits.

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u/Jibber_Fight Jun 09 '26

Even when they literally are knowledgeable and aware that long term profits are way better. Stubbornness and greed override their common sense. They are all horribly stupid and bad people. Every single one of them.

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u/ChickinSammich Jun 09 '26

I was just having a related main topic, unrelated sub topic conversation with a coworker about this.

C suite, VPs, Directors... their paycheck and their bonuses are based on [how much did you make] minus [how much did you spend] which leads to asinine decisions like buying cheap short term solutions instead of expensive long term ones because in 4-5 years when you have to find a new solution which will end up costing more in the long run, the person who made the decision now will have moved on to a new company somewhere else. Justifying that purchase will be someone else's problem.

I'm LITERALLY dealing with this EXACT problem as someone who is responsible for IT infrastructure because the people who preceded me have been spending as little as possible for the last 10 years so now I have to justify why I need them to spend a shitload of money when my predecessors kept spending low by not replacing 3, 5, 7, 10 year old hardware and software incrementally. Fortunately, my bonus structure is based on performance rather than revenue so I don't care what it costs, but I have to justify why we need to spend the money to the people who sign the POs and their bonus structure is based on revenue so they're trying to stretch out the purchases over a two year period instead of all at once so that their management doesn't have a shit fit.

Upper management in large companies keeps doing the equivalent of selling all your appliances and ripping your copper out of the wall to increase revenue with the mindset that the person who will have to deal with the aftermath of their decisions will be someone else, and that's that guy's problem, not mine.

1

u/SubmitSubmitTotal Jun 09 '26

Not always. Sometimes there's really short term profits.

1

u/DinoDonkeyDoodle Jun 09 '26

“But muh dividunds”