The Federal Trade Commission (FTC) has filed a new complaint against Microsoft regarding recent changes to Xbox Game Pass, arguing the price hikes and tier restructuring exemplify the consumer harm they warned about during the Activision Blizzard acquisition.
FTC's Concerns
In its filing, the FTC highlighted several issues:
- Discontinuation of the $10.99/month Console Game Pass
- New users must pay 81% more for Game Pass Ultimate
- Introduction of a degraded Game Pass Standard tier at $14.99/month
- Withholding of day-one releases from the Standard tier
The agency views these changes as product degradation combined with price increases, which they claim validates their earlier merger concerns.
Microsoft's Response
Microsoft has pushed back against the FTC's characterization, stating:
- The new Standard tier is not degraded as it includes multiplayer functionality
- Game Pass Ultimate's price increase to $19.99/month comes with added value
- Day-one releases like Call of Duty will be available on Ultimate tier
The company argues these changes offer more value to consumers, not less.
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Analysis
While both sides make some valid points, there are issues with each argument:
- Microsoft's claim of added value is undermined by the overall price increases
- The FTC's focus on subscription changes contrasts with their original merger concerns
Ultimately, the price hikes align with industry trends, as seen with other gaming and streaming services. However, the timing so soon after the Activision acquisition raises questions about Microsoft's long-term strategy for Game Pass.
As this dispute heads to the US Court of Appeals, it highlights the ongoing tension between tech giants and regulators in an evolving digital marketplace. The outcome could have significant implications for how subscription gaming services are structured and priced in the future.
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