Microsoft recently announced that it would increase the prices of the Xbox Game Pass tiers and introduce a new ‘Standard’ tier into the lineup. However, this decision has caused some issues for the company, as the FTC lodged a letter with the US Court of Appeals, alleging that Microsoft’s action of raising the prices of the Xbox Game Pass tiers is harming consumers.
According to the FTC’s letter, Microsoft’s decision to exclude the most valuable games from their new service is a form of ‘consumer harm’ and ‘product degradation’. The absence of Day One releases in the new Standard tier is a key point of contention.
The FTC’s letter further suggests that these changes and “reduced investments in output and product quality via employee layoffs” indicate “the firm exercising market power post-merger.”
The FTC additionally claimed that this hike for the Xbox Game Pass tiers will “coincide with” Microsoft adding Call Of Duty games to the most expensive tiers in their service and that “discontinuing the Console tier will happen shortly before releasing CoD’s newest game.”
FTC concluded that Microsoft had promised this acquisition would “benefit consumers” as they would provide Call of Duty titles on Game Pass the day they were released without increasing the price of the service.
Microsoft made history last year when it acquired Activision Blizzard for a record sum of $69 billion. However, several regulators accused the console manufacturer of being anti-competitive, and Microsoft had to overcome many obstacles before finalizing the deal. Although Microsoft managed to handle all the cases, the FTC wouldn’t let them off the hook so quickly.
FTC filed an appeal late last year to overrule the decision and recently filed a notice against Microsoft for the Activision Blizzard layoffs. Microsoft responded to the previous claim and would likely respond to the one related to Xbox Game Pass price hikes, too.
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Microsoft is going to have to change political affiliation now. The last person’s administration was much more in favor of business while the current one is a mess and it’s not just them tired of it. Warner Bros wants to sell off but they can’t under the current regulations either to Disney, Comcast, or maybe Netflix. Microsoft also wants to go back to acquiring publishers.