Microsoft has recently introduced significant changes to Xbox Game Pass, including a revised tier structure and pricing model. Clearly, the Federal Trade Commission (FTC) leaves no room for ambiguity regarding its sentiments towards itself. It’s alleged that these companies now represent precisely the kind of client harm they sought to prevent last year.
If you’ve been living in relative isolation for a few years, you may have missed the recent news that Xbox Game Pass subscription prices will increase when your next bill arrives.
The lengthy courtroom battle between the Federal Trade Commission and Microsoft over the potential consequences of their acquisition of Activision Blizzard may have been overlooked.
The Federal Trade Commission has filed a new letter in its ongoing inquiry into the proposed acquisition, arguing that the recent changes to Xbox Game Pass amount to the very type of harm to consumers that the agency warned about last year when it began scrutinizing the deal.
Product degradation – essentially erasing valuable games from Microsoft’s new service – combined with price increases for existing customers is precisely the kind of harm to consumers that the FTC has alleged. It wrote: “Microsoft’s value will increase and product degradation, alongside lowered investments in output and product quality through worker layoffs (as seen in the FTC’s February 7, 2024, Letter), are the hallmarks of a company abusing its market power post-merger.”
The text then references an announcement Microsoft made during last year’s court proceedings, stating that the price of Xbox Game Pass would not increase directly due to Activision’s games being added to the service, according to their recommendation.
“The FTC noted that Microsoft’s value will rise in tandem with the addition of Name of Responsibility to its priciest Game Pass tier, while discontinuing the Console tier is expected shortly before the release of CoD’s latest installment. Microsoft had committed to making CoD available on its Game Pass from console launch day, without any price increase for the service resulting from the acquisition.”
“The physical evidence ultimately substantiates Congress’s decision to temporarily halt mergers, allowing for a thorough examination of their potentially detrimental consequences, and judges’ concerns about assurances that contradict an entity’s financial interests.”
As you grapple with the implications of these Game Pass updates, let us help simplify them for you.
