Microsoft
The FTC says across-the-board price increases Microsoft recently The Xbox Game Pass subscription service tier is the very embodiment of the consumer harm that the FTC alleges the merger caused.” Tried to block the Microsoft-Activision merger. in Letter to the Court Posted as part of Ongoing FTC Appeals In the lawsuit, federal regulators argue that Microsoft’s actions are a clear example of “product degradation” brought about by “companies exercising market power after a merger.”
The main focus of the letter is the soon-to-be-discontinued $10.99-per-month Console Game Pass tier, which will be replaced with a $14.99-per-month Game Pass Standard tier (a 36 percent price increase) that no longer includes “day one” access to all of Microsoft’s first-party titles. To keep this important benefit, “Console” subscribers will have to pay 81 percent more for the $19.99-per-month Game Pass Ultimate tier, which includes many additional benefits over the current $10.99-per-month option.
Is this “acquisition based”?
The FTC said these changes were ” call of duty “Previously, it was the most expensive tier of Game Pass. Microsoft has publicly promised This Game Pass access to Activision’s hugely popular shooter game “will not have an increase in service price as a result of the acquisition.”
The “subject to acquisition” clause likely gives Microsoft some leeway in asserting its planned price changes. Inflation is also reason enough to explain most of the nominal price increase. The $14.99 that Microsoft charged for one month of Game Pass Ultimate was When it was released in 2019 That’s equivalent to $18.39 today. BLS CPI CalculatorWhen Microsoft raised the monthly price of Game Pass Ultimate from $14.99 to $16.99 last yearShortly before its merger with Activision closed, the company said in a statement that it had “adjusted prices to reflect competitive conditions in each market.”
Microsoft may have a hard time dealing with the “degradation” that comes with moving from the discontinued Game Pass Console tier to the new, more expensive Game Pass Standard tier. Sure, the replacement tier includes the online multiplayer perks of Game Pass Core that were previously available to purchase separately. But the removal of the long-promised day-one access to first-party games will significantly reduce the value most subscribers get from the new option.
The F.T.C. First announcement of intention to appeal The ruling was effectively suspended Attempted injunction The merger deal was met with opposition from some. Microsoft and Activision have since gone ahead with their merger, but the courts have A similar merger was overturned on appeal. Even after the merger agreement has been fully executed.
Elsewhere in the letter, the FTC cites its previous allegations. Microsoft recently implemented roughly 2,000 job cuts, with a focus on Xbox. This is a sign of “reduced investment in production volume and product quality” following the merger.
