FTC Challenges Microsoft's Xbox Game Pass Price Hike, Citing Consumer Harm After Activision Merger

The Federal Trade Commission (FTC) has taken a firm stance against Microsoft's recent price adjustments to its Xbox Game Pass, highlighting the move as a detriment to consumers. This comes in light of Microsoft's acquisition of Activision Blizzard, which the FTC had previously tried to prevent.

Earlier this month, Microsoft rolled out modifications to its Xbox Game Pass subscription, raising prices across all membership tiers. This includes changes to both the Ultimate tier and the introduction of a new Standard tier, which is set to replace the Console version. The FTC reacted by lodging a complaint with the U.S. Court of Appeals for the Ninth Circuit, highlighting consumer harm as a primary issue.

The FTC's latest filing points to "product degradation," specifically the removal of high-value games from the service, combined with increased prices for existing users. This, according to the FTC, aligns with the negative outcomes they had anticipated from the merger. The filing underscores the FTC's argument that this price hike was one of the primary reasons they opposed the merger initially.

Moreover, the FTC contends that the new Standard tier does not align with Microsoft's previous assurances that the acquisition would be beneficial for consumers. The promise was that games like Call of Duty would be available on Game Pass on their release day without any price hikes attributable to the merger. The recent actions by Microsoft seem to contradict these promises, according to the FTC.

In addition, the FTC highlights how Microsoft’s increased Game Pass prices, coupled with reduced investments in output and product quality—exemplified by employee layoffs—indicate the abuse of market power following the merger. The FTC also notes a correlation between the price increases and the addition of Call of Duty to the most expensive tier of the Game Pass, with the Console tier's discontinuation set to occur shortly before a new Call of Duty game release.

Microsoft has recently confirmed that Call of Duty: Black Ops 6 will be available on Xbox Game Pass from the first day for all members when it launches later this year. This announcement marks it as the first new installment in the series to be included in the service from day one.