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The Federal Trade Commission (FTC) has expressed strong concerns regarding Microsoft's recent changes to its Game Pass pricing and strategy. This scrutiny follows Microsoft's acquisition of Activision Blizzard, raising questions about the company's commitments and the potential impact on consumers. The FTC previously highlighted potential consumer harm resulting from Microsoft's acquisition of Activision Blizzard. According to the FTC, "The product degradation, such as the removal of the most valuable games from Microsoft's new service, combined with price increases for existing users, exemplifies the type of consumer harm anticipated from the merger."
The FTC has criticized Microsoft for implementing price increases while simultaneously reducing product quality. Specific concerns include the removal of launch games on day one, which diminishes the value of the service for subscribers. Additionally, the FTC has pointed out numerous layoffs by Microsoft this year, further questioning the company's investment in production and product quality. The FTC's criticism extends to Microsoft's broader business practices post-merger. "Microsoft's price increases and product degradation, combined with lower investments in production and quality through employee layoffs, are indicative of a company leveraging its market power following the merger," stated the US regulator. The timing of Microsoft's price increases has also raised concerns. The FTC noted that the price hike coincides with the addition of Call of Duty to the most expensive Game Pass tier, while its removal from the console tier is scheduled just before the release of a new Call of Duty game. This strategy has been perceived as a move that could disadvantage existing subscribers.
Microsoft had previously assured that the inclusion of Call of Duty would benefit all Game Pass subscribers. According to the FTC, Microsoft claimed that "the acquisition would benefit users by making [Call of Duty] available on Microsoft Game Pass on the day of its console launch, without any increase in the service price due to the purchase."
The FTC's concerns suggest that Microsoft's recent actions may negatively impact consumers by reducing the value of their subscriptions and potentially stifling competition. The price increases, coupled with the removal of key games, could lead to a less favorable experience for Game Pass subscribers. Additionally, the layoffs might indicate a shift in focus away from quality and innovation. The regulatory body's scrutiny highlights the importance of holding companies accountable for their commitments, particularly in large mergers that have the potential to significantly alter market dynamics. "
