UPDATE 1/23/21 11:37 a.m. ET: Microsoft has walked back its plans to increase the price of Xbox Live Gold subscriptions, leaving prices as they were. Additionally, Microsoft will no longer require an Xbox Live Gold subscription to play free-to-play online multiplayer games such as Fortnite.
"We're turning this moment into an opportunity to bring Xbox Live more in line with how we see the player at the center of their experience," Microsoft said in a statement.
"We are working hard to deliver this change as soon as possible in the coming months."
Our original story continues below:
Microsoft bumped the price of its Xbox Live Gold subscription to $10.99 for a one-month membership, up from $9.99. Three-month memberships now cost $29.99, a $5 increase and six-months cost $59.99. This is the first Xbox Live Gold price increase since 2010.
Players can choose to convert their Gold subscriptions to Game Pass subscriptions. If they jump from Xbox Live Gold to Xbox Game Pass Ultimate, which includes both the Gold subscription required for online multiplayer and access to the rotating free games featured in Game Pass, they'll pay no extra cost.
"For example, if you have 11 months of Xbox Live Gold now, and you upgrade to Xbox Game Pass Ultimate, those 11 months convert to 11 months of Ultimate at no additional cost," Microsoft said in its announcement.
Once that time elapses, players will start paying the higher cost for Game Pass Ultimate, but Microsoft is betting the added value of the subscription will convince players to stay subscribed. In addition to Game Pass for PC and console, players gain access to EA Play and the cloud gaming service xCloud. The $14.99 per month price tag of Game Pass Ultimate becomes a mighty tempting proposition given all that value, especially next to the $10.99 of Gold.
Industry analyst Daniel Ahmad says this move aligns with Microsoft's larger strategy around user monetization.
"Microsoft's goal has always been to move every Gold Subscriber to a higher tier (Game Pass Ultimate)," Ahmad wrote on Twitter. "Increase the revenue per user on its platform."
Current Gold subscribers who have pre-paid subscriptions up to 12 months will continue to pay the old price, but will automatically renew at the higher price when their pre-paid term ends. Microsoft says it will email affected users, and won't increase the price until at least 45 days after they receive the message.