Do you remember the recent changes Microsoft made to Xbox Game Pass? Both in terms of the tiers offered and the pricing? Well, the FTC certainly isn’t fazed by that. In fact, it now claims that the changes are “exactly the kind of consumer harm” it was trying to prevent last year.
If you’ve been living in seclusion for the past few years, first, your Xbox Game Pass subscription may be more expensive the next time you get a bill than it was before you went into seclusion, thanks to the changes we learned about last week (and we’re sorry to break the news). Second, you may have missed the lengthy court battle between the Federal Trade Commission and Microsoft over the potential impact of its acquisition of Activision Blizzard.
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Now, the FTC has filed a new letter in its ongoing appeal of the deal, claiming that these recent changes to Game Pass represent exactly the kind of negative consequences for consumers that the agency claimed could occur when it reviewed the lawsuit last year.
“Product downgrading—removing the most valuable games from Microsoft’s new service—combined with price increases for existing users is exactly the kind of consumer harm the FTC alleges the merger caused,” it wrote. “Microsoft’s price increases and product downgrading—combined with Microsoft’s reduced investment in output and product quality through layoffs, see the FTC’s February 7, 2024 letter—are hallmarks of a company exercising market power post-merger.”
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It then cited a statement Microsoft made during last year’s court action, in which the company said the price of Xbox Game Pass would not increase directly as a result of Activision’s games being added to the service.
The FTC wrote: “Microsoft’s price increase coincides with the addition of Call of Duty to Game Pass’ most expensive tier, and the discontinuation of console tiers will occur shortly before the release of the latest Call of Duty game. Microsoft promised that ‘the acquisition will benefit consumers, [CoD] They will be available on Microsoft’s Game Pass the day they launch on consoles (the price of the service will not increase after the acquisition).”
The agency concluded: “Microsoft’s post-merger actions vindicate Congress’s decision to initially halt mergers to fully assess their likely competitive effects, and the Justice Department’s skepticism of promises that are inconsistent with a company’s economic incentives.”
If you’re still trying to understand what these Game Pass changes mean for you, check out our helpful attempt to outline them in a non-confusing way.
