Microsoft has announced significant price increases for its Xbox Game Pass, a Netflix-style subscription service for video games, in a move that could see prices rise by up to 25%.

This follows the tech giant's acquisition of gaming studio Activision Blizzard for a record $69 billion in 2023.

The new pricing structure will see monthly charges for the PC Game Pass rise by £2 to £9.99, while the premium service, Game Pass Ultimate, will also increase by £2, reaching £14.99 per month. In a notable shift, Microsoft will replace its standard subscription tier for Xbox consoles in September, requiring gamers to subscribe to Game Pass Ultimate to access new releases on launch day.

The price hikes come after Microsoft's announcement in May that the highly anticipated Call of Duty: Black Ops 6 would be available immediately to Game Pass subscribers. This strategy is viewed as an attempt to disrupt the traditional gaming industry model, which has long relied on the sale of physical game copies.

Game Pass, akin to Sony's PlayStation Plus service, allows console and PC players to access a library of hundreds of games for a monthly fee. Unlike streaming services, Game Pass enables users to download games to play offline. The service boasts around 34 million subscribers worldwide, all of whom will now face higher subscription costs.

The new pricing for UK subscribers is as follows:
- Game Pass Ultimate: Monthly fee rising from £12.99 to £14.99
- PC Game Pass: Monthly fee increasing from £7.99 to £9.99
- Game Pass Core: Annual fee going up from £49.99 to £55.99

While these changes take immediate effect for new subscribers, existing members with recurring payments will see the new rates applied in September. Xbox gamers with a basic subscription will retain access to hundreds of games until their current subscription expires, although they will miss out on newly released titles and some additional games reserved for Ultimate subscribers.

Microsoft hinted that "some games" available on Game Pass Ultimate at launch might later be added to the standard subscription. However, the price hikes have made Game Pass Ultimate more expensive than Sony's PlayStation Plus Premium, which is priced at £13.49 per month in the UK.

Industry analysts suggest that the price increases and the push for console users to upgrade to a more expensive tier are likely linked to the decision to release Call of Duty: Black Ops 6 directly on Game Pass. Observers had previously questioned how Microsoft could sustain this strategy, with GamesIndustry.biz's Christopher Dring speculating that the company might "introduce higher tiers to Game Pass or other monetisation techniques" to offset the costs.

The Call of Duty franchise, which has sold over 425 million copies and generated tens of billions of dollars, remains a pivotal part of Microsoft's gaming strategy.