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The U.S. Federal Trade Commission (FTC) has blasted Game Pass price hike in a new letter arguing against Microsoft’s purchase of Activision Blizzard. The FTC’s appeal against the merger is pending before the Court of Appeals for the Ninth Circuit, where the authority is attempting to make the case that Microsoft’s consolidation activity harms consumers.
Game Pass price hike shows Microsoft’s unchecked power post Activision merger, says FTC
In its letter (via The Verge), FTC argues that Microsoft has “degraded” Game Pass by squeezing more money out of existing customers and introducing an inferior tier that doesn’t offer the day-one releases it has always promised. The authority sees this as evidence of Microsoft exercising its post-merger market power unchecked.
The FTC also highlighted the mass layoffs at Xbox, many of which impacted Activision Blizzard.
“Microsoft’s price increases and product degradation — combined with Microsoft’s reduced
investments in output and product quality via employee layoffs — are the hallmarks of a firm exercising market power post-merger,” FTC wrote. “Microsoft’s price increases coincide with adding Call of Duty [Black Ops 6] to Game Pass’s most expensive tier, and discontinuing the console tier will happen shortly before releasing CoD’s newest game.”
Microsoft had previously promised that all Game Pass users will be able to play Black Ops 6 at launch.