Microsoft has made changes to its Xbox Game Pass service that are “exactly the sort of consumer harm” from its Activision acquisition that the Federal Trade Commission (FTC) was worried about, the agency wrote in a letter addressed to the US Appeals Court. The FTC’s letter focused on a recent price hike for the Xbox Game Pass and pointed out that the Game Pass Ultimate now costs $20 a month, which is $3 more per month than before and represents a 17 percent year-over-year increase.
In addition, the agency called attention to Microsoft’s decision to discontinue the $11 Console Game Pass plan. The agency added a new Game Pass Standard tier, but it costs more at $15 a month. While it’s a step up from the barebones Core plan, it doesn’t include access to day-one releases, leading the FTC to call it a “degraded product.” Microsoft will fully discontinue the Console tier just before the launch of the next Call of Duty game, the FTC said. Call of Duty: Black Ops 6 will be playable via Game Pass from its release date on October 25, which means subscribers who want to access it on day one will have to pay for the $20-a-month tier.
The company promised 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),” the FTC wrote. But Microsoft’s actions show a firm that’s “exercising market power post-merger,” it noted.
The FTC repeatedly challenged Microsoft’s purchase of Activision Blizzard, but a judge rejected its request for an injunction. At the time, the judge ruled that the FTC failed to demonstrate how the merger would lessen competition and even said that there was “record evidence” pointing to “more consumer access to Call of Duty and other Activision content.”
Microsoft, which officially closed the $69 billion deal in October 2023 after that ruling and after the blessing of regulators in the EU and the UK, now officially owns Activision Blizzard. But the FTC still isn’t done opposing the merger and filed an appeal in an attempt to the block the already-closed deal, telling the court that it can prove its case by showing that Microsoft has the ability and incentive to withhold Activision’s games. Back in February, the agency also accused Microsoft of going against its pledge to allow Activision Blizzard to operate independently post-acquisition after the company laid off nearly 2,000 employees in its gaming division.
