In response and according to VGCthe UK Competition and Markets Authority’s statement regarding Microsoft’s acquisition of Activision Blizzard, Xbox has firmly confirmed that it has no plans to raise the Xbox Game Pass subscription price.
“Subscription prices can be easily revised, and Microsoft may have an incentive to do so once it adds content as popular as Activision’s, including CoD,” the UK CMA said as part of its preliminary findings on the merger.
However, in response, Microsoft said prices will not increase as a result of said merger to compensate for the release of Activision Blizzard games on the service.
“Prices will not increase as a result of the merger, and certainly will not increase to a point that outweighs the substantial benefits of Activision titles coming to Game Pass someday and someday.”Microsoft said in its response. “This is especially true as Game Pass will continue to be limited by B2P (buy to play or buy to play in English).”
The arguments of Microsoft and the Game Pass
To back up their point, Microsoft pointed out that games released by Bethesda after its integration did not result in an increase in its subscription prices. And that includes big franchises like Fallout, Doom, Dishonored there Ancient Scrolls. The company claims that acquiring Activision Blizzard would encourage them to ensure better distribution of games, as well as increase production of games released in Game Pass:
“The integration of Activision and Microsoft will result in a classic elimination of the double marginalization effect because Microsoft will be able to acquire these games at an (opportunity) cost and will have incentives to distribute them more widely and increase the production of Game Pass compared to their but-for level Microsoft said. “To increase production, Microsoft will need to offer Game Pass at a lower quality-adjusted price.
“This is exactly what Microsoft has done when adding content to Game Pass in the past, for example the ZeniMax transaction resulted in additional content but no increase in Game Pass subscription prices. This is especially true as Game Pass users are price sensitive and a price increase would affect all users, including those who do not rate or play CoD.
“Game Pass subscribers can cancel at any time after a month of play. months will be missing due to the higher price.
“As such, any price increase would be counterproductive, as it would increase subscriber churn rates. This is completely at odds with Microsoft’s assessment of the rationale for the merger.”
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