Microsoft’s Xbox boss says recent Game Pass price cuts are already delivering a lift in subscriber sign-ups and retention, after last year’s pricing changes hit growth.

In an internal memo reportedly obtained by The Verge, Xbox CEO Asha Sharma told staff that the service had suffered following earlier price rises and changes to its subscription tiers.

“Growth slowed down and subscriber loss accelerated after the pricing and SKU changes last year,” Sharma said.

However, she said the company had seen early signs of improvement since cutting prices in April.

“Since our price reduction we have seen acquisitions grow and retention improve, which is a good first step,” Sharma said.

Microsoft reduced Xbox Game Pass Ultimate in Australia from A$29.99 to A$22.99 a month, while PC Game Pass fell from A$16.49 to A$13.99. The cuts did not fully reverse the previous price hikes, with Ultimate having previously cost A$19.99 a month and PC Game Pass A$11.99.

Sharma warned staff that pricing alone would not fix the business.

“We will not solve this in one moment or one launch,” she said. “We will have to outwork the problem in front of us in our path to restore durable growth.”

The comments come as Microsoft continues to rethink its gaming strategy under Sharma, who succeeded Phil Spencer earlier this year.

white xbox one game controller

The company has also shifted branding from Xbox to XBOX, a move Sharma framed as part of a broader reset.

“We are building a stronger Xbox,” she said. “That means making hard choices about what we build, where we invest, and what kind of company we need to be going forward.”

Microsoft is also experimenting with new ways to grow Game Pass. Earlier this month, Xbox and Discord announced a partnership giving Discord Nitro subscribers access to a Game Pass “starter edition”, including more than 50 PC and console titles, along with limited cloud gaming access.

Sharma said Xbox plans to make Game Pass a more flexible system over time, with further testing and changes expected as Microsoft tries to rebuild long-term subscriber growth.