Xbox Live Gold was always going to remove the free paywall this year

On Friday morning, Microsoft announced that it was increasing the price of its Xbox Live Gold subscription service. By Friday night, he reversed that decision and something else. In an update to its news post about the price change, the company explained that it was “wrong.” And according to sources familiar with the matter, the Xbox leadership came to that conclusion quickly after loud public outcry from gamers, but also comments from other Xbox teams.

In the future, new and existing Xbox Live Gold subscribers can join the service for the current price. That means $ 10 per month, $ 25 for three months, $ 40 for six months, and $ 60 per year. That runs counter to the now-abandoned plan of raising prices to $ 11 per month, $ 30 for three months, and $ 60 for six months. On top of that, you will soon no longer need an Xbox Live Gold membership to access the online features of free games.

“We are working hard to make this change as soon as possible in the next few months,” the blog update reads.

This is an exciting change for people who want to play Fortnite or Call of Duty: Warzone with friends. But removing the paywall for free games was already on Microsoft’s roadmap by the end of this year. The company is simply accelerating those plans.

“The [free-to-play] The ad has been in the works for months and that ad was removed today to help offset the reaction to the original price increase ad. ” Niko Partners analyst Daniel Ahmad tweeted on Saturday, January 23..

I can corroborate that claim.

But what else happened here? Specifically, what did Microsoft accomplish to convince decision makers to reverse this decision so quickly? It was a combination of factors that you probably already know if you were one of the many people who complain about the price increase on social media.

Xbox is afraid of losing narrative value

It was obvious that many key people on the Xbox team were putting in overtime dealing with the fallout from the pricing decision on Friday night. Xbox Executives and Communications Specialists tweeted references to your long work day after the update hit the blog post around 9PM PST. The team made a team effort to figure out how to respond, but everyone felt they had to do something.

The reason this was such a dire situation for Microsoft is because the public perception of the price increase threatened the foundations of Xbox’s future. The company did not launch the Xbox Series X / S with Halo, so it is focusing on Game Pass. And Game Pass works because it’s “big business,” according to anyone who’s talked about it.

Microsoft needs to maintain that momentum as its development teams slowly build games to grow the service. Any dent in the perception of value is something that could potentially derail the entire business model.

And the protest against the increase in Xbox Live Gold was more than a dent.

Microsoft was particularly concerned about a couple of responses. For one thing, internal decision makers hated to see people point out that it would cost $ 120 per year to play Fortnite on an Xbox while it’s free on PC, mobile devices, and all other consoles.

Fortnite on Microsoft Windows: free to play
Fortnite on Nintendo Switch: free to play
Fortnite on Playstation: free to play
Fortnite on Xbox: $ 120 / year

– Jeff Grubb (@JeffGrubb) January 22, 2021

This also hurt the perception of the value of the Xbox Series S, which Microsoft wants people to see as an inexpensive way to enter next-gen games.

But the biggest concern was that the price of Xbox Live Gold could affect the perception of Xbox Game Pass. With no Halo: Infinite or any other massive game on the market, Game Pass is a crucial offering. But if consumers were to assume that Microsoft is only trying to hook gamers into the service so it can double the price in a few months, all that positive sentiment could evaporate in an instant.

Xbox leadership instantly felt that stumbling block, and it left them with no doubt about reversing the rise in the price of gold.