For consumers, this is more of a de-cluttering effort than a money-saving move. The best deal on both services currently runs $180 a year (that's $60 for a year of Gold and $120 for a year of Game Pass, paying monthly or quarterly), which is exactly what Game Pass Ultimate costs. Essentially, Xbox is tempting more Gold players to try Game Pass, which serves as the backbone of the company's digital-first future.
Game Pass grants access to a digital library of more than 100 games, which are available to download and play as long as the subscription is active. This isn't quite "Netflix for games," since the titles have to be installed locally, but Microsoft is working on a streaming service and Xbox hardware that could take advantage of the Game Pass ecosystem.
Of course, Microsoft isn't the only company seriously considering game streaming. Google recently revealed Stadia, an ambitious streaming system that's set to go live later this year.
Xbox Live Gold, meanwhile, enables online multiplayer gaming. It also offers players up to four free games each month and unlocks discounts via Deals with Gold.
Rumors of Game Pass Ultimate started leaking earlier this month, alongside renewed reports of a disc-free Xbox One S. Microsoft officially revealed the Xbox One S All-Digital Edition today, just after announcing Game Pass Ultimate.