US FTC Calls Out Recent Game Pass Changes as Post-Merger “Consumer Harm”

The US Federal Trade Commission (FTC) is not happy about the upcoming Game Pass price increases and the launch of a new Xbox Game Pass Standard without day-one access to Microsoft’s first-party games. And the antitrust regulator is using what it describes as “product degradation” to support its ongoing case against the software giant.

The FTC commented on Microsoft’s recent Game Pass changes in a letter to the U.S. Court of Appeals for the Ninth Circuit (via IGN) You may remember after losing its lawsuit to block Microsoft’s acquisition of Activision Blizzard, the FTC filed an appeal with the U.S. Court of Appeals for the Ninth Circuit, which has yet to announce a final decision. Anyway, the FTC isn’t wasting time to claim that these Game Pass changes prove that Microsoft’s acquisition of Activision Blizzard was bad for consumers.

As a reminder, Microsoft has now discontinued Xbox Game Pass for Console for new customers. For existing subscribers, the $10.99/month subscription will continue to provide access to the full Game Pass catalog, including day-one releases such as the upcoming Call of Duty: Black Ops 6. The new $14.99/month Xbox Game Pass Standard tier, however, will provide access to most of the Game Pass catalog, but it won’t have new first-party games on day one. Microsoft explained in a support page that these games may be added to the Game Pass Standard library at a future date. In practice, this could be “up to 12 months or more and will vary by title.”

According to the FTC, Microsoft raising the price of Xbox Game Pass Ultimate (which will still have day-one games) and making Xbox Game Pass Standard 36% more expensive than the existing Xbox Game Pass for Console (without day-one games) had to be expected. “Product degradation—removing the most valuable games from Microsoft’s new service—combined with price increases for existing users, is exactly the sort of consumer harm from the merger the FTC has alleged,” the US regulator said.

The FTC went further and argued that “Microsoft’s reduced investments in output and product quality via employee layoffs,” combined with these upcoming Game Pass price increases, are “the hallmarks of a firm exercising market power post-merger.” Last but not least, the FTC also pointed out Microsoft’s previous promise that its acquisition of Activision Blizzard “would benefit consumers by making Call of Duty available on Microsoft’s Game Pass on the day it is released on console (with no price increase for the service based on the acquisition).”

These are obviously valid points from the FTC, though there’s no way Microsoft wasn’t going to increase Game Pass prices after spending $68 billion to acquire Activision Blizzard. Microsoft had already raised the price of Xbox Game Pass for Console and Xbox Game Pass Ultimate in July 2023, just three months before it completed the biggest acquisition in its history. If PC Game Pass was the only tier to not get a price increase back then, it will soon go from $9.99/month to $11.99/month in September without any changes to the current benefits.