The US Federal Trade Commission (FTC) has sharply criticized Microsoft’s new pricing policy for the Xbox Game Pass service, calling the new «tariff a degraded product».
Microsoft recently announced about the price increase for PC Game Pass and Xbox Game Pass Ultimate, as well as plans to launch a new Game Pass Standard tariff. This news caused a negative reaction from the FTC, which expressed its position in appeal to the U.S. Court of Appeals for the Ninth Circuit.
The Commission believes that the new Game Pass Standard tariff is a «inferior product» because new users will not be able to subscribe to the $10.99 Game Pass for Console, which includes access to games on the day of their release. Instead, the Xbox Game Pass Standard will cost $14.99 and will not provide access to new games on release day, but will include online multiplayer.
In its complaint, the FTC states: «Microsoft’s price increases and deterioration in product quality, along with its reduced investment in production and product quality through employee layoffs, are signs of a company exercising post-merger market power».
This appeal is part of the ongoing appeals The FTC is appealing a district court’s decision not to block Microsoft’s acquisition of Activision Blizzard last year. Although Microsoft finalized the $68.7 billion deal in October 2023, the Court of Appeals for the Ninth Circuit has yet to rule on the FTC’s appeal.
The FTC’s criticism centers on the fact that the removal of the most valuable games from Microsoft’s new service, combined with price increases for existing users, is exactly the kind of consumer harm from the merger that the FTC warned about.
Source: TheVerge
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