FTC and Microsoft argue over whether Xbox Game Pass is now worse

The FTC isn’t too happy with Microsoft’s recent changes to Xbox Game Pass, which increased the price of Ultimate, adding a new tier that’s void of exclusive releases on day one.

In a new filing, the FTC says this is exactly the kind of thing they were worried about when the Activision Blizzard deal was struck:

“Microsoft is discontinuing its $10.99/month Console Game Pass product. Users of that product must pay 81% more to upgrade to Game Pass Ultimate. For consumers who don’t want to pay 81% more, Microsoft is introducing a new downgraded product, Game Pass Standard, at $14.99/month. This product costs 36% more than Console Game Pass and doesn’t release games on day one. The downgraded product—removing the most valuable games from Microsoft’s new service—combined with price increases for existing users is exactly the kind of consumer harm the merger is causing, the FTC says.”

Microsoft, however, responded by saying that the FTC mischaracterized the different tiers and that in fact it makes everything better:

“It is incorrect to characterize this product as a “downgraded” version of the discontinued Game Pass for console offering. This discounted product did not offer multiplayer functionality, which had to be purchased separately for an additional $9.99 per month (bringing the total cost to $20.98 per month). While Game Pass Ultimate will increase in price from $16.99 to $19.99 per month, the service will offer more value with many new games available “day-and-date,” including the upcoming release of Call of Duty, which has never before been available on a day-and-date subscription service.”

I think there are elements that don’t work in both of these arguments, but I’m sorry, is Microsoft’s response here that they’re raising prices for Game Pass Ultimate in part because Call of Duty is now launching there? Isn’t that exactly the kind of thing the FTC was calling bad and anti-consumer?

I also think Microsoft is glossing over the fact that for Xbox Live Gold, aka access to online multiplayer, there used to be frequent bundles that dramatically reduced the price below $9.99 per month or $120 per year. No bundles for the $15 or $20 tiers of Game Pass, meaning they cost $180 or $240 per year, respectively. So I can’t believe this whole “it’s better now!” thing that absolutely no consumer believes, judging by the widespread negative reaction to these price/tier changes.

That said, subscription services are constantly increasing their prices. From streaming services to Microsoft’s rival Sony with its PS Plus, it seems to be happening every month, and I don’t think you can necessarily say that any of it is due to the merger, other than that statement about Call of Duty. I’m pretty sure that if the Activision Blizzard acquisition hadn’t happened, Microsoft would have increased Game Pass prices anyway, as they struggle to onboard new subscribers and need to extract more money from existing ones.

It’s not great either way, but even if Microsoft is being disingenuous, I don’t think the FTC has much to say given the state of the industry as a whole.

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