The regulator isn’t happy with Microsoft’s Game Pass changes.
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The Federal Trade Commission (FTC) has blasted Microsoft’s Xbox Game Pass price increases in a filing to the US Court of Appeals for the Ninth Circuit. Microsoft revealed last week that it’s increasing PC Game Pass and Xbox Game Pass Ultimate prices, and planning to launch a new Game Pass Standard tier soon without day one access to first-party Xbox games.
The FTC calls this new Game Pass Standard tier a “degraded product,” because new Game Pass users won’t be able to sign up to the $10.99 Game Pass for Console, which includes day one game access. Instead, Xbox Game Pass Standard will be priced at $14.99 and won’t include day one games, but will include online multiplayer.
“Microsoft’s price increases and product degradation — combined with Microsoft’s reduced investments in output and product quality via employee layoffs — are the hallmarks of a firm exercising market power post-merger,” says FTC in a filing today. “Product degradation — removing the most valuable games from Microsoft’s new service — combined with price increases for existing users, is exactly the sort of consumer harm from the merger the FTC has alleged.”
The filing is part of an ongoing appeal lodged by the FTC against a district court’s decision not to block Microsoft’s Activision Blizzard acquisition last year. Microsoft finalized its $68.7 billion deal in October, but the Ninth Circuit Court of Appeals still hasn’t ruled on the FTC’s appeal yet.
