The Federal Trade Commission of the United States (FTC) sharply criticized Microsoft's new pricing policy for the Xbox Game Pass service, calling the new tariff a "degraded product."
Microsoft recently announced price increases for PC Game Pass and Xbox Game Pass Ultimate, as well as plans to launch a new tariff Game Pass Standard. This news provoked a negative reaction from the FTC, which expressed its position in a filing to the United States Court of Appeals for the Ninth Circuit.
The Commission believes that the new Game Pass Standard tariff is a "downgraded product" because new users will not be able to subscribe to Game Pass for Console at $10.99, which includes access to games on the day of their release. Instead, Xbox Game Pass Standard will cost $14.99 and will not provide access to new games on the release day, but will include multiplayer online gaming.
In its filing, the FTC notes: "Microsoft's price increases and product quality deterioration, accompanied by reductions in production investments and product quality due to employee layoffs, are signs of a company that is wielding market power after a merger."
This filing is part of the ongoing appeal by the FTC against the district court's decision not to block Microsoft's acquisition of Activision Blizzard last year. Although Microsoft completed the $68.7 billion deal in October 2023, the Ninth Circuit Court of Appeals has not yet ruled on the FTC's appeal.
The FTC's criticism focuses on the fact that removing valuable games from Microsoft's new service, combined with price increases for existing users, is precisely the type of harm to consumers from a merger that the FTC warned about.
Source: TheVerge
Comments (0)
There are no comments for now