The FTC is none too please with Microsoft’s recent changes to Xbox Game Pass, which hiked the price of Ultimate which added a new tier that lacks day one releases of exclusives.
In a new filing, the FTC says this is exactly the sort of thing they were worried about when the Activision Blizzard deal went through:
“Microsoft is discontinuing its $10.99/month Console Game Pass product. Users of that product must pay 81% more to switch to Game Pass Ultimate. For consumers unwilling to pay 81% more, Microsoft is introducing a new degraded product, Game Pass Standard, at $14.99/month. This product costs 36% more than the Console Game Pass, and withholds day-one releases. Product degradation – removing the most valuable games from Microsoft’s new service – combine with prices increases for existing users is exactly the sort of consumer harm from the merger the FTC has alleged.”
Microsoft, however, has responded, saying the FTC is mischaracterizing the different tiers and in fact this makes it all better:
“It is wrong to call this a “degraded” version of the discontinued Game Pass for Console offering. That discounted product did not offer multiplayer functionality, which had to be purchased separate for an additional $9.99/month (making the total cost $20.98 a month). While Game Pass Ultimate’s price will increase from $16.99 to $19.99/month, the service will offer more value through many new games available “day-and-date.” Among them is the upcoming release of Call of Duty, which has never before been available on a subscription service day-and-date.”
I think there are bits and pieces that don’t work in both these arguments, but I’m sorry, is Microsoft’s counter here that they are raising Game Pass Ultimate prices in part because Call of Duty is now launching there? Is this not the exact kind of thing the FTC was arguing is bad and anti-consumer?
I also think Microsoft is glossing over the fact that for Xbox Live Gold, aka online multiplayer access, there used to be frequent bundles that would drastically reduce the price below $9.99 a month or $120 a year. Now, there are no bundles for the $15 or $20 tiers of Game Pass, meaning those cost $180 or $240 a year respectively. So I cannot buy this “it’s improved now!” idea that absolutely zero consumers believe is true, judging by the widespread negative reaction to these price/tier changes.
That said, subscription services are…hiking prices all the time. From streaming services to Microsoft rival Sony with PS Plus, this is happening every month it seems like, and I don’t think you can necessarily say that this is all due to the merger, that Call of Duty statement aside. I fully believe that had the Activision Blizzard acquisition not happened Microsoft would have raised Game Pass prices anyway as they struggle to onboard new subscribers and must extract more money from old ones.
It’s not great either way you look at it, but even if Microsoft is being disingenuous I don’t think the FTC has a ton to stand on given the state of the industry as a whole.
