FTC Says Xbox Game Pass Price Hikes Constitute “Product Degradation”

The FTC doesn’t like Xbox Game Pass Standard.

The United States Federal Trade Commission (FTC) challenged Xbox Game Pass price increases in a filing with the United States Court of Appeals for the Ninth Circuit earlier this week.

Ahead of the filing, Xbox announced to customers that Game Pass would see some drastic changes in September, including a new Xbox Game Pass Standard tier (without day one titles) as well as price increases for every Game Pass tier, including Xbox Game Pass Ultimate and PC Game Pass.

In its filing, the FTC called the new level and price increases a sign of “product degradation.”

“[Game Pass Standard] “The service costs 36% more than Console Game Pass and is blocking releases on day one,” the filing reads in part. “The product degradation (removing the most valuable games from Microsoft’s new service) combined with price increases for existing users is exactly the kind of harm the merger is causing consumers, the FTC says.”

“Microsoft’s price increases and product degradation, combined with Microsoft’s reduced investment in production and product quality through employee layoffs[…]— are characteristics of a firm exercising market power after a merger,” the FTC continued.

The FTC said the price increases were also “inconsistent” with the case Microsoft brought against the FTC in a lawsuit last year.

We will keep you informed of developments.

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