UPDATED: Xbox Game Pass Price Increases Make A "Degraded Product" According To FTC Filing With Appeals Court

When American courts refused to block the Microsoft purchase of Activision Blizzard last year, the Federal Trade Commission (FTC) set to work on filing an appeal. Without being blocked, Microsoft moved forward with the merger and has since absorbed the World of Warcraft and Call of Duty developer. Shortly after the merger, Microsoft laid off almost 1900 employees, many at Activision Blizzard.

In a new filing with the US Court of Appeals for the Ninth Circuit, the FTC points at the recently announced Game Pass price increases as a "degraded product" and calls the price increase "the hallmarks of a firm exercising market power post-merger,"

The price increases announced do away with the now $10.99 Xbox Game Pass for Console tier for future members and replaces it with a $14.99 option that, while including multiplayer, does not include Day One game releases. Game Pass Ultimate will see a $3 monthly price increase taking the package to $19.99 a month. These price increases are expected to go into effect on September 12th.

The FTC suggests to the court that the price increase and package change runs directly counter to Microsoft's claims during trial that "the acquisition would benefit consumers by making [CoD] 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)." CoD referencing Call of Duty, something that wouldn't be available Day 1 on the lowest tier subscription in the new price lineup since it is expected to release in October. This change now puts Day One access to Call of Duty in the most expensive tier of Game Pass.

I wouldn't expect anything much to come of this filing, it seems like more of a "see we told you to slow down on ruling against blocking mergers and don't believe promises" memo than anything else. However, the Appeals Court hasn't ruled on the FTC's appeal yet, so maybe it could help them on that front a little.

UPDATE 7/22/2024: Microsoft has responded to the FTC's claims above in a filing with the Appeals Court claiming that the FTC is trying to "reinvent" its case, is wrong to call the new packages "degraded", and points out that the removed packages did not include multiplayer but the new bundles offer that service.

Microsoft has responded to the FTC's filing about Xbox Game Pass price increases. It calls the FTC's letter a "misleading, extra-record account of the facts" and says the FTC is wrong to call Game Pass Standard a “degraded” version because it includes multiplayer https://t.co/ocS9yfwSix pic.twitter.com/QXUoViUpoL

— Tom Warren (@tomwarren) July 19, 2024