FTC Criticizes Xbox Game Pass Price Hikes in Latest Appeal

The Federal Trade Commission on Wednesday pointed to Microsoft’s recent pricing overhaul for Xbox Game Pass as Evidence of damage caused by their merger Activision Blizzard has had a huge impact on consumers. The agency has introduced a new letter in Continuous call For his part, Apple’s CEO criticized the deal reached last year, describing the changes as “precisely the kind of consumer harm that the FTC has alleged as a result of the merger.”

Despite losing a lawsuit seeking an injunction, In July 2023, the FTC appealed the decision to the U.S. Court of Appeals for the Ninth Circuit. While awaiting a final decision from those judges, the FTC has submitted additional evidence to support its claims that the merger would harm gaming competition and harm customers, including a letter from earlier this year after Microsoft announced it would appeal its decision on its merger with Activision Blizzard. Nearly 2,000 employees have been laid off. Across newly acquired teams.

Today’s message (via Games Fray) is trying to use Microsoft’s recent chaotic changes to Game Pass to bolster its case, pointing to the fact that Game Pass for Console will disappear for new and expired subscribers and be replaced by a more expensive “standard” package that doesn’t include day-one releases like this fall’s release. Call of Duty: Black Ops 6, It was acquired as part of the Activision deal. The result is that only the Game Pass Ultimate subscription, which is now $20 per month, will include access to all Game Pass games.

“Microsoft’s price increases and product deterioration—combined with Microsoft’s reduced investments in production and product quality through employee layoffs, see FTC letter of February 7, 2024—are hallmarks of a company exercising post-merger market power.” The Federal Trade Commission writesIt also points to a statement Microsoft made in its filings during the trial last summer suggesting that Game Pass wouldn’t become more expensive simply because Activision Blizzard games were added to it.

“Here, the acquisition would benefit consumers by making [Call of Duty] “The game will be available on Microsoft’s Game Pass service the day it is released on console (with no increase in the price of the service based on the acquisition),” the company wrote at the time. That specific quote He made the rounds. On several websitesThat strategy has since appeared to be at odds with this month’s sharp price increases, though Microsoft may be trying to argue that it wasn’t the acquisition that directly prompted the overhaul, but a larger shift in strategy around its subscription service business.

“Thus, Microsoft’s post-merger actions justify Congress’s determination to halt mergers in advance to fully assess their potential competitive effects, and to be judicially skeptical of promises that conflict with the company’s economic incentives,” the FTC letter concluded. It’s unclear when a final decision on the appeal will be made, and it’s hard to know what the consequences will be if Microsoft loses the case. It would undoubtedly be more chaotic and confusing than fixing Game Pass.