Microsoft & Xbox Game Pass Are In Trouble Again

Summary Despite approval of the merger, Microsoft's changes to Xbox Game Pass have reignited FTC scrutiny.

The FTC alleges Microsoft raised prices, degraded product quality, and exercised market power post-merger.

Consumers have reacted negatively to price hikes, and have threatened cancellations as Xbox Game Pass's reputation suffers.

Microsoft has spent the better half of two years battling the Federal Trade Commission over monopolistic, anti-consumer, and anti-competition allegations and while the company's merger with Activision/Blizzard may have been approved, recent changes to Xbox Game Pass have put the lawsuit back under the spotlight. Despite the ruling made on July 11, 2023, against the injunction, an appeal made by the FTC ensured that the matter would continue, resulting in further investigations. Following several controversial moves in 2024, the FTC is swinging back at Microsoft, alleging the company is actively participating in practices it warned against.

Per The Verge, a recent filing to the US Court of Appeals for the Ninth Circuit sees the FTC calling out Microsoft for increasing the price of Xbox Game Pass and introducing what it describes as a "degraded product" in the form of the new Standard Tier subscription. It states that discontinuing "Console Game Pass," which cost $10.99 a month, and replacing it with a more expensive version ($14.99) that doesn't include Day One releases is a clear example of forcing consumers to pay more for a worse product. Microsoft has yet to formally respond to the filing.

Related Is it time to cancel your Xbox Game Pass subscription? Microsoft has announced a change to Xbox Game Pass and its tiers. The hike has now begun for new subscribers, with existing subs seeing an increase from September 12. US members of the subscription service will see Game Pass Ultimate rise from $17 to $20, while Game Pass Core will go from a $60 annual cost to $75. PC Game Pass will jump from $10 to $12 a month. Xbox is also introducing a new tier: Xbox Game Pass Standard, for $15 a month. Players are reacting as expected, with lots saying the price hike is too much to justify. What do you think of the price hike and will you be cancelling your Xbox Game Pass subscription?

Microsoft Is Having A Very Bad Year

Xbox Is Suffering Plenty Of Controversies

While the core argument put forward by the FTC is the introduction of a degraded product, the new filing goes on to further state that Microsoft's employee layoffs and studio closures have resulted in reduced investments in outputs and quality products. This is in reference to the company's controversial decision to shutter several popular studios in early 2024: Tango Gameworks, Arkane Austin, Alpha Dog Studios, and Roundhouse Games. The FTC goes on to state that this is one of the "hallmarks of a firm exercising market power post-merger."

Finally, the FTC noted that the price increase comes just ahead of Call of Duty: Black Ops 6 launch, a game that Microsoft promised would be available as a Day One release on Xbox Game Pass. Previous statements made by the company that the addition of Call of Duty to Game Pass would "benefit consumers" have now been called into question. Many Game Pass subscribers have shared similar sentiments by stating that the addition of a single franchise, no matter its popularity, is not enough to justify such a major price increase.

Whether or not this latest filing has a substantial impact on the FTC's appeal against Microsoft's merger remains to be seen. Xbox Game Pass's reputation as the so-called "best deal in gaming" has taken a substantial knock because of the price hike and many users are threatening to permanently cancel their subscriptions. How Microsoft plans on moving forward from this point will likely be revealed in the next few weeks.

Source: The Verge