The Federal Trade Commission alleges that Microsoft’s recent decisions regarding Xbox Game Pass will harm consumers.
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Some time ago, Microsoft announced that it would be make big changes to its multi-game subscription service Xbox Game Pass. The price of Game Pass Ultimate has been increased by $3, from $16.99 per month to the new price of $19.99 per month, and the Game Pass Console tier has now been removed entirely and will be replaced by a new, higher-cost Standard tier “in the coming months” that removes the daytime hangouts and trades that greatly benefit online multiplayer.
The adjustments were spotted by the FTC, which is currently appealing a July 2023 decision by Judge Jacqueline Scott Corley that closed the $70 billion Microsoft-Activision merger. In a new filing, the FTC alleges that these price increases, coupled with the new “downgraded” Xbox Game Pass Standard product, will harm consumers.
3A closer look at Xbox Game Pass Ultimate pricing trends from launch to today.
The file states:
“The Federal Trade Commission writes to alert the court to Microsoft’s announced price increases in the multi-game subscription and cloud gaming markets, which the district court found relevant to the merger analysis. Microsoft is increasing the price of its Game Pass Ultimate product from $16.99/month to $19.99/month, a 17% increase year over year.
“Additionally, Microsoft is discontinuing its $10.99/month Console Game Pass product. Users of that product must pay 81% more to upgrade to Game Pass Ultimate. For consumers who don’t want to pay 81% more, Microsoft is introducing a downgraded product, Game Pass Standard, at $14.99/month. This product costs 36% more than Console Game Pass and does not offer releases on the day they are released.
“The product degradation—the removal of Microsoft’s most valuable games from its new service—combined with price increases for existing users is exactly the kind of consumer harm the merger has caused the FTC.
“Microsoft’s price increases and product degradation, combined with Microsoft’s reduction in investment in production and product quality through employee layoffs, are hallmarks of a company exercising market power after the merger.
“It is important to note that Microsoft’s actions are inconsistent with Microsoft’s statements below.
“Microsoft’s price increases coincide with the addition of Call of Duty to the most expensive tier of Game Pass, and the discontinuation of the Console tier will occur shortly before the release of the final Call of Duty game.”