Microsoft Gaming has appointed Asha Sharma as its new CEO, replacing Phil Spencer after 38 years with the company. Sharma is reportedly considering revamping Game Pass pricing to make the service more accessible, with ambitions to help make "future consoles and products like Game Pass more enticing to a broader range of customers" by offering lower-priced tiers.
The timing matters. In October 2025, Microsoft raised Game Pass prices dramatically, with Game Pass Ultimate jumping 50% to $30 per month. Game Pass Premium costs $15 monthly, Game Pass Essential runs $10, and PC Game Pass is $16.50. The price shock triggered significant consumer pushback. The Xbox website reportedly crashed under the weight of players rushing to unsubscribe.
Ad-Supported Gaming and Netflix Talks
Microsoft could offer an ad-based tier for Game Pass in which people may be able to watch ads in exchange for playing Game Pass titles for free. In internal testing, employees have been able to stream some titles after seeing around two minutes of advertising, with access currently limited to one hour per session and five hours per month.
The strategy echoes Netflix's playbook. The freemium approach, where free access is subsidized by advertising revenue, allows Microsoft to monetize a segment of gamers who would otherwise remain untapped, aligning with Microsoft's broader vision of making Xbox Game Pass the "Netflix of gaming," combining subscription income with ad-based revenue streams.
Netflix co-CEO Greg Peters hinted at deeper collaboration. Peters said he and Sharma have "kicked around ideas" for how Netflix and Xbox could work together on subscription bundles, though nothing has been confirmed and Peters said he "wouldn't eliminate any possibilities."
Who Is Sharma and What Is She Up Against
Sharma was a surprise pick partly because she has no prior video-game industry leadership experience and limited background as a gamer, though she has experience running large tech platforms and the clear trust of Microsoft CEO Satya Nadella. She previously served as Chief Operating Officer at Instacart and Vice President at Meta, bringing deep experience building and growing platforms, aligning business models to long-term value, and operating at global scale.
Sharma's history in user acquisition was a primary motivator for her selection, as Xbox has seen declining console sales over recent years. Her appointment also raised eyebrows because her selection passed over Spencer's second in command Sarah Bond.
Sharma has stated her current goal is "proof over promise," saying the business has faced challenges and that she will use her expertise and gaming leaders around her to help grow the business.
The Bigger Picture
The reality is complex. Cloud gaming demands immense, ongoing investment in global server infrastructure, and advertising provides a vital secondary revenue stream to help offset operational costs and justify the platform's expansion. However, the Game Pass thesis, while noble in its attempt to shift gaming distribution, came from desperation.
A free tier serves as a crucial tool for market expansion, particularly in regions where mobile gaming dominates and expensive console hardware is less common, offering a no-cost entry point to the Xbox ecosystem for a global audience. For Australian gamers accustomed to Australian pricing, Sharma's emphasis on accessibility could matter. Xbox Cloud Gaming is already supported in nearly 30 countries worldwide, including Australia.
Whether lower prices and ad-supported tiers can reverse subscriber fatigue remains uncertain. Sharma has committed to being "fully in this thing," saying this team has brought Xbox back before and she is there to help it do so again. The market will judge whether her platform expertise and cost-cutting focus can succeed where traditional gaming industry know-how could not.