Updated: July 20, 2024 Xbox fired back at the FTC, calling it “wrong” and “misleading” to call the revised Xbox Game Pass tiers “degraded,” and saying the commission “barely mentioned it.” [concerns about] subscription[s] “In court.”
“Earlier this month, Microsoft announced changes to its game subscription service, Game Pass, to offer consumers more value choices at different price points,” Xbox said in court documents filed yesterday, Friday, July 19.
“Microsoft is offering a new service tier, Game Pass Standard, which gives you access to hundreds of back-catalog games and multiplayer features for S$14.99 per month.”
“It would be a mistake to call this a ‘cheaper version’ of the discontinued Game Pass for consoles, which had no multiplayer and required a separate purchase for $9.99 per month (total cost $20.98 per month).”
“Game Pass Ultimate’s price will increase from $16.99 to $19.99 per month, but the service will offer even more value as many new games will be available on the ‘same day’, including upcoming Call of Duty releases that have never been available same day with a subscription before.”
“The FTC barely mentioned subscriptions at trial, focusing instead on the theory that Microsoft was withholding Call of Duty from Sony’s consoles. The district court correctly rejected that theory, but it was further weakened by the 10-year deal Microsoft and Sony had made to keep Call of Duty on PlayStation, a deal Sony was ‘thrilled’ to get.”
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Microsoft also said the FTC had retroactively[ed] “Focus” has been added to the subscription service.
“While it is common for companies to change their service offerings over time, the FTC’s lawsuits in all markets have always been based on the premise of vertical market foreclosure — that Microsoft withheld Call of Duty from rivals, thereby harming competition,” Microsoft continues.
“But even in the so-called subscription market, Call of Duty is not being withheld from those who want it, and there is no evidence that it has harmed competition. Sony’s subscription service continues to thrive, despite the fact that, unlike Microsoft, it rarely adds new games to its subscriptions on a daily basis.”
“Thus, the transaction continues to benefit competition and consumers, exactly what the district court correctly found.”
The original story is below.
original work: The Federal Trade Commission (FTC) slammed Microsoft’s Xbox Game Pass tier changes as a “lower quality product” and said that by “removing Microsoft’s most valuable games from its new service,” Microsoft had caused “the exact same consumer harm the FTC alleges the merger caused.”
Microsoft confirms Major changes to Xbox Game Pass subscription service, including price hike Announced earlier this month, the change comes ahead of the launch of Call of Duty: Black Ops 6 in October and will see the removal of the day one release of the overhauled base tier.
FTC Filing The US 9th Circuit Court of Appeals said Microsoft’s announcement gave reasons why it was “necessary to halt the merger and fully evaluate its competitive effects,” adding that it was “inconsistent” with what Microsoft said when the FTC originally intervened to block its acquisition of Activision Blizzard.
“Microsoft’s removal of its most valuable games from its new service would result in product degradation and higher prices for existing users, exactly the kind of consumer harm the FTC alleges the merger would cause,” the filing said.
“Microsoft’s price increases, declines in product quality, and reductions in investments in production volume and product quality due to employee layoffs are characteristic of companies exercising market power after a merger.”
“Microsoft has promised that the acquisition will benefit consumers. [Call of Duty] “It will be available on Microsoft’s Game Pass the same day it releases on consoles (there will be no price increase on the service as a result of the acquisition).”
Earlier this year, The FTC argued that Xbox and Activision Blizzard’s plans to cut 1,900 jobs contradict statements made in court last year. How Activision remains structurally independent.
“By continuing to oppose this deal, the FTC ignores the reality that the deal itself has been significantly changed,” a Microsoft spokesperson said in a statement to Eurogamer at the time.
“Since losing the FTC case last July, Microsoft has been asked by the UK competition authority to restructure its global acquisitions, which prevented it from acquiring cloud streaming rights for Activision Blizzard Inc.’s games in the US. In addition, Sony and Microsoft have entered into a binding agreement for Sony to continue Call of Duty on PlayStation on more favourable terms than before.”
