The Federal Trade Commission (FTC) has called Microsoft’s recently announced Game Pass price rises “exactly the sort of consumer harm” it tried to stop by fighting the company’s acquisition of Activision Blizzard.
Following a court victory for Microsoft last year, which the FTC is currently appealing, the corporation completed its $69 billion acquisition of Activision Blizzard in October 2023.
The agency is continuing to submit evidence while its appeal is considered, and in a new filing on Thursday, it highlighted Microsoft’s new Game Pass tiers, which include a price increase for Ultimate and a new Standard tier that doesn’t include day one releases.
“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,” it wrote.
“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.”
The FTC’s letter goes on to note that, “Microsoft’s price increases coincide with adding Call of Duty to Game Pass’s most expensive tier, and discontinuing the Console tier will happen shortly before releasing CoD’s newest game.”
It notes that, “Microsoft promised that ‘the acquisition would benefit consumers by making [CoD] 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 agency concludes by claiming that Microsoft’s post-merger actions vindicate its earlier scepticism of promises it made regarding Game Pass.
Previously, The FTC alleged that Microsoft’s decision to make mass layoffs earlier this year contradicted previous statements it made in court about how it planned to run the Xbox business if it acquired Activision Blizzard.
Microsoft’s lawyers later responded to the FTC’s claim, saying its “factual assertions are incomplete and misleading”.
From this month, Xbox’s top Game Pass Ultimate tier will increase in price to $19.99 / £14.99 / €17.99 per month (up from $16.99 / £12.99 / €14.99). PC Game Pass will also increase in price to $11.99 / £9.99 / €11.99.
Significantly, Microsoft has retired its Xbox Game Pass for the Console tier for new users. This will soon be replaced with a new $14.99 “Standard” tier, which will include access to a back catalogue of games, and online play, but no day-one releases or cloud gaming.