Microsoft’s decision to raise the price of subscriptions for existing Xbox Game Pass customers is not in line with its promises surrounding its acquisition of Activision, the FTC says.”Microsoft’s price increases and product degradation…are the hallmarks of a firm exercising market power post-merger,” the FTC says in a July 18 letter to the US Court of Appeals for the Ninth Circuit, which handled the Microsoft-Activision merger case.Recently, Microsoft announced a new tier for its Xbox Game Pass called Xbox Game Pass Standard, a $15 monthly subscription for new members that excludes day-one releases, EA Play, PC Game Pass, and cloud gaming. Customers who have Xbox Game Pass Ultimate will have its price raised from $17 to $20, and a yearly sub to Xbox Game Pass Core, which only offers online play and a smaller library, will jump from $60 to $75 (the $10 monthly fee remains unchanged). PC Game Pass is increasing from $10 monthly to $12, GameInformer reports. Meanwhile, the company is ditching its Game Pass for Console and won’t allow new subscribers. Existing subscribers will also be permanently locked out of this tier if they fail to renew their accounts.It’s that cancelation that caught the FTC’s attention. According to the agency, Microsoft is requiring customers to take on a substantial price increase or accept a degraded product, noting that the Game Pass Standard does not include day-one releases.
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“Microsoft promised that ‘the acquisition would benefit consumers by making [Call of Duty] available on Microsoft’s Game Pass on the day it is released on console (with no price increase for the service based on the acquisition),'” the letter says.The FTC closes by noting that “Microsoft’s post-merger actions thus vindicate the congressional design of preliminarily halting mergers to fully evaluate their likely competitive effects, and judicial skepticism of promises inconsistent with a firm’s economic incentives.”
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