Xbox Game Pass Announcement Sparks Controversy with FTC

Last week, Xbox made headlines with its announcement of new Game Pass tiers and subscription price increases set for September 12. However, this move has caught the attention of the Federal Trade Commission (FTC), leading to a recent filing to the US Court of Appeals for the Ninth Circuit.

New Game Pass Tiers and Price Changes

The new tiers include Xbox Game Pass Standard for $15 a month, Xbox Game Pass Ultimate for $20 a month, and Xbox Game Pass Core with a yearly subscription increased to $75. In addition, PC Game Pass will see a monthly price increase to $12. With these changes, the $10.99 Game Pass for Console option is no longer available to new subscribers.

FTC Response

The FTC criticized Microsoft’s decision to discontinue Game Pass for Console, highlighting the significant price increase (81%) for users to switch to Game Pass Ultimate. Those who opt for Game Pass Standard would be missing out on day-one releases, leading the FTC to label it as a “degraded product.”

The FTC expressed concern over Microsoft’s acquisition of Activision Blizzard and the impact on consumers through these changes in offerings and pricing. The commission believes that these actions demonstrate Microsoft exerting market power post-merger.

The FTC also noted that Microsoft’s recent price hikes and shift in product offerings contradict statements made during the Xbox FTC trial, specifically regarding the availability of Call of Duty: Black Ops 6 on Game Pass Ultimate and related pricing details.

As this situation unfolds, it raises questions about the competitive effects of mergers and the importance of ensuring promises made align with a company’s economic incentives. Stay tuned for further developments as the gaming industry navigates these changes.