GoKawiilThe big picture: Microsoft's efforts to make Xbox services more affordable are clashing with rising component and operating costs. Just months after the company reversed last year's steep Game Pass price hikes, it plans to add new limitations and new ways for customers to pay more money.
Microsoft will introduce monthly time limits for Xbox Cloud Gaming starting in November. Game Pass subscribers and non-subscribers can purchase additional time.
Higher subscription tiers will include more cloud streaming hours per month: five hours for Game Pass Essential subscribers, 10 for Premium, and 15 for Ultimate.
Although pricing details for additional hours remain unconfirmed, Microsoft did confirm that non-subscribers can buy streaming hours to play games they own over the cloud. The company estimates the new restrictions will affect only around 4% of Game Pass subscribers, suggesting that most use cloud gaming for short sessions to complement offline gaming.
Microsoft cited the rising cost of maintaining streaming infrastructure as the primary reason for the change, claiming that more users are streaming games for longer. The company's primary cloud gaming competitor, GeForce Now, already caps paid subscribers at 100 hours of streaming per month, far more generous than Xbox's new tiers; only GeForce Now's free tier relies on one-hour session limits instead of a monthly cap.
The move comes a few months after Microsoft significantly cut subscription costs, admitting that last year's price hike cost it millions of subscribers. Microsoft also recently began testing a free plan where ads precede one-hour game sessions of titles users own. The new restrictions indicate that the company is still trying to limit costs while growing its audience.
Although Microsoft blames rising streaming infrastructure costs, the company may also be looking for new ways to monetize users as rising memory costs lead to steep hardware price hikes.
Because of explosive demand from AI data centers, RAM costs have roughly quintupled over the past year, and experts expect prices to continue rising until at least 2028. As a result, the entry-level Xbox Series S now matches the original price of the Series X, which now starts at $750 with limited availability.
Sony is also searching for solutions to the same challenges, recently admitting that it will prioritize increasing per-customer profitability over attracting new customers.
The controversial decision to cease manufacturing physical PlayStation game discs starting in 2028 is likely about cutting costs and drawing users toward higher-priced digital versions of games. Meanwhile, Sony also just introduced free, ad-supported live TV to every PS5.