Following criticism from the US Federal Trade Commission, Microsoft has defended its decision to introduce the $14.99 per month “Game Pass Standard” subscription, which is 36% more than the soon-to-be-discontinued Game Pass for consoles.
In a filing, the federal regulator called the Redmond-based company’s move “a product degradation — removing the most valuable games from Microsoft’s new service — combined with price increases for existing customers, which is exactly the kind of consumer harm the merger causes, the FTC says.”
In a letter to the U.S. Court of Appeals for the 9th Circuit, Microsoft said: “It is wrong to characterize this product as a ‘downgraded’ version of the discontinued Game Pass for console offering. That discontinued product did not offer multiplayer functionality, which had to be purchased separately for an additional $9.99/month (bringing the total cost to $20.98/month).”
The tech giant added: “While Game Pass Ultimate will increase in price from $16.99 to $19.99 per month, the service will offer more value with a host of new games available on a day-and-date basis. This includes the upcoming release of Call of Duty, which has never before been available on a day-and-date subscription.”
Parent company Xbox also noted that the FTC wasn’t that concerned about price increases during Microsoft’s acquisition of Activision Blizzard (ATVI).
“Leaving aside the fact that it is common for companies to change their service offerings over time, the FTC’s case in all of its putative markets has always been premised on vertical foreclosure, whereby Microsoft would deny Call of Duty to its rivals and thus harm competition,” the tech giant continued.
“But even in the subscription market, Call of Duty isn’t being denied to anyone who wants it. And there’s no evidence of competitive harm: Sony’s subscription service continues to thrive, even though it adds few new games to its daily offerings, unlike Microsoft.”