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If you haven’t heard from the FTC in a while, they’re back, this time it’s Xbox Game Pass subscriptions. Following Microsoft’s announced changes to the service, with different tiers of services and pricing changes, the FTC has jumped back into the fray, calling Microsoft’s new Xbox Game Pass Standard tier a “degraded product.”
The FTC says the changes come after Microsoft bought Activision, claiming that the American company exercises market power after the merger.
FTC Blames Microsoft Over Xbox Game Pass Changes
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 aren’t willing to pay 81% more, Microsoft is launching a downgraded product, “Game Pass Standard,” at $14.99/month.
This product costs 36% more than Console Game Pass and retains day-one versions. The degradation of products, the removal of the most valuable games from Microsoft’s new service, combined with price increases for existing users, is exactly the kind of consumer harm the merger is causing the FTC.
Microsoft’s price increases and product degradation, combined with Microsoft’s reduced investment in production and product quality through layoffs (see FTC February 7, 2024), are hallmarks of a company exercising market power after the merger.
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