After Microsoft announced its plans to raise the prices of its Xbox Game Pass and introduce a ‘Standard’ tier that wouldn’t include any Day One releases, the Federal Trade Commission has now slammed the company and labelled its subscription service a “degraded product”.
The Federal Trade Commission (FTC) has criticized Microsoft for raising the price of Xbox Game Pass.
The tech company recently announced it would be increasing the price of the gaming subscription service – with Xbox Game Pass Ultimate jumping from $16.99 to $19.99 a month – while also introducing a ‘Standard’ tier for $14.99 a month, which won’t include any Day One releases like ‘Call of Duty: Black Ops 6’.
Now, the FTC has bashed Microsoft – who merged with Activision Blizzard last year – and their plans, calling move “consumer harm”.
In an open letter to the gaming business, the government body wrote: “Product degradation – removing the most valuable games from Microsoft’s new service – combined with price increases for existing users, is exactly the sort of consumer harm from the merger the FTC has alleged.
“Microsoft’s price increases and product degradation – combined with Microsoft’s reduced investments in output and product quality via employee layoffs – are the hallmarks of a firm exercising market power post-merger.
“Microsoft promised that ‘the acquisition would benefit consumers by making [‘Call of Duty’] available on Microsoft’s Game Pass on the day it is released on console (with no price increase for the service based on the acquisition)’.”
The agency – who took Microsoft to court once the company revealed its plans to lay off 1,900 people across Xbox and Activision Blizzard after it bought the publisher for $68.7 billion in October – added the announcement proved why it was crucial government bodies should “halt mergers to fully evaluate their likely competitive effects”.
FTC slams Xbox Game Pass price hike, labelling a ‘degraded product’
