Last week, Xbox announced that it would be introducing new Game Pass tiers and raising subscription prices for existing members on September 12. The Federal Trade Commission (FTC) took issue with those changes in a filing with the 9th Circuit Court of Appeals yesterday.
In case you missed it, Microsoft has released a new tier. Xbox Game Pass Standard$15/month subscription for new members, excludes launch day releases, EA Play, PC Game Pass, and cloud gaming. Xbox Game Pass UltimateThe monthly fee for this benefit will increase from $17 to $20. Xbox Game Pass CoreThe annual subscription price, which only offers online play and a small library, will increase from $60 to $75 (the $10 monthly fee will remain the same). PC Game Pass It increases from $10 to $12 per month.
Also $10.99 Game Pass for Console Starting July 10th, new subscribers will no longer be able to access this tier. Existing subscribers who fail to renew their membership will be permanently locked out of this tier and will be forced to sign up for a different, more expensive membership.
In its filing, the FTC criticized Microsoft for discontinuing Game Pass for consoles, saying that users would have to pay a significant price increase (81%) to switch to Game Pass Ultimate. Users who don’t want to switch will have to settle for Game Pass Standard, which the FTC describes as an “inferior product” because it excludes the launch date.
“(Game Pass Standard) is 36% more expensive than console Game Pass, and it’s holding back on its first-day launch. The product degradation (removing the most valuable games from Microsoft’s new service) and the increased prices for existing users are exactly the consumer harms the FTC alleges from the merger.”
The FTC has been the most vocal opponent of Microsoft’s acquisition of Activision Blizzard, viewing the move as a statement of its concerns about the deal.
“Microsoft’s increased prices, lowered product quality, and reduced investment in production and product quality through layoffs are all hallmarks of a company that exercises market power after a merger.”
The FTC argues that the price increases are “inconsistent” with claims Microsoft made in last year’s Xbox FTC trial. “Microsoft promised that ‘consumers would benefit by offering (CoD) on Microsoft Game Pass on the day the acquired consoles launch (without any price increases to the service resulting from the acquisition.’” Microsoft’s post-merger actions thus demonstrate both a congressional design to halt a merger preemptively to fully assess the potential competitive effects of the merger and judicial skepticism about promises that are inconsistent with the companies’ economic incentives.
The last part notes that the first new game released after the acquisition, Call of Duty: Black Ops 6, launched on Game Pass Ultimate on October 25, roughly a month after the subscription tier’s price increase.
