The Federal Trade Commission (FTC) has called Microsoft’s recently announced Game Pass price increases “exactly the kind of consumer harm” it tried to stop by fighting the company’s acquisition of Activision Blizzard.
Following a legal victory for Microsoft last year, which the FTC is currently appealing, the company completed its $69 billion acquisition of Activision Blizzard in October 2023.
The agency continues to submit evidence as its appeal is considered, and in a new filing 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.
“The product degradation – the removal of the most valuable games from Microsoft’s new service – combined with price increases for existing users, is exactly the type of consumer harm caused by the merger that the FTC has alleged,” he wrote.
“Microsoft’s price increases and product degradation, combined with Microsoft’s reduced investment in production and product quality through layoffs, are hallmarks of a company exercising market power after the merger.”
The FTC letter goes on to note that “Microsoft’s price increases coincide with the addition of Call of Duty to the most expensive tier of Game Pass, and the discontinuation of the Console tier will occur shortly before the release of the final CoD game.”
He notes that “Microsoft promised that “the acquisition would benefit consumers by allowing them to [CoD] available on Microsoft Game Pass on the day of its console release (with no price increase for the service due to the acquisition).’”
The agency concludes by saying that Microsoft’s actions after the merger justify its previous skepticism about the promises it made regarding Game Pass.
Previously, the FTC had argued that Microsoft’s decision to carry out mass layoffs earlier this year contradicted previous statements it had 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 complaint, saying its “factual assertions are incomplete and misleading.”
Starting this month, the price of Xbox Game Pass Ultimate will increase to $19.99 / £14.99 / €17.99 per month (up from $16.99 / £12.99 / €14.99). The price of Game Pass on PC will also increase to $11.99 / £9.99 / €11.99.
Microsoft has killed its Xbox Game Pass for new users. It will soon be replaced with a new $14.99 “Standard” plan, which will include access to a catalog of games and online play, but no launch-day releases or cloud gaming.