Do you remember the recent changes Microsoft made to Xbox Game Pass in terms of offer tiers and pricing? Well, the FTC is definitely not confused about what to think of them. In fact, it now claims they represent “the exact kind of consumer harm it was trying to prevent last year.”
If by some miracle you’ve been living under a rock for the past few years, for starters, the next time you get a bill, your Xbox Game Pass subscription may be more expensive than it was before you were living under a rock, thanks to what we learned last week These changes (sorry to disclose this to you). Second, you may have missed the lengthy court battle between the Federal Trade Commission and Microsoft over the possible repercussions of acquiring Activision Blizzard.
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Now, the FTC has filed a new letter in its ongoing appeal of the deal, which claims the recent Game Pass changes are a negative consumer impact the agency claims may have occurred during its last review of the acquisition.
“Product downgrades—removing the most valuable games from Microsoft’s new service—combined with price increases for existing users are exactly the harm the FTC alleges the merger will cause to consumers,” it wrote. “Microsoft’s price increases and product downgrades—combined with Microsoft’s reduction in investment in volume and product quality through layoffs—see FTC letter dated February 7, 2024—an example of a company’s post-merger exercise of market power logo.
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It then cited a statement Microsoft made during last year’s court proceedings, in which the company said the price of Xbox Game Pass would not increase as a direct result of Activision Blizzard games being added to the service.
“Microsoft’s price increase coincides with the addition of Call of Duty to Game Pass’s most expensive games and the discontinuation of console gaming shortly before the release of CoD’s latest game,” the FTC wrote. “Microsoft committed to ‘the acquisition’ will benefit consumers because [CoD] The game will be available on Microsoft’s Game Pass the day it’s released on console (the service won’t see a price increase due to the acquisition).
The agency concluded: “Microsoft’s post-merger actions demonstrate Congress’s design to initially halt the merger to fully assess its possible competitive effects, as well as the Justice Department’s suspicion of commitments that are inconsistent with the company’s economic incentives.”
If you’re still trying to digest what these Game Pass changes mean for you, check out our helpful attempt at outlining them in a non-confusing way.
