FTC slams Xbox Game Pass price hike as 'product degradation'

The Federal Trade Commission (FTC) has flagged the recent price increase for Xbox Game Pass, deeming it as product degradation. This was emphasized in a new filing in the U.S. Ninth Circuit Court of Appeals. The FTC criticized the move as inconsistent with the case made during last year’s Xbox FTC trial, specifically pointing out the new Standard tier's lack of day-one releases despite higher charges compared to the original Console Game Pass tier. Additionally, the FTC highlighted that this increase coincides with the inclusion of Call of Duty in the most expensive tier and predicts potential future ad introductions to the service. The price adjustments are said to be part of Microsoft’s strategy to recoup its substantial $69 billion investment in Activision Blizzard, whose acquisition was finalized on October 13, 2023. These changes are set to impact existing subscribers starting September 12.

The FTC criticized the Xbox Game Pass price increase because it views the move as product degradation, describing it as harmful to consumers. This assessment was laid out in a recent court filing, citing the removal of valuable games from the service while increasing the price for existing tiers. The FTC also believes the increase is inconsistent with Microsoft’s previous statements during last year’s antitrust trial. The agency argues that these changes reflect exactly the kind of consumer harm it foresaw with Microsoft's merger with Activision Blizzard.

Xbox Game Pass is a subscription service that offers a wide library of games for a monthly fee. The service has been praised for providing access to new releases on day-one, which was a significant selling point. The recent price hike eliminates this perk in the new standard tier, causing dissatisfaction among gamers. Following Microsoft's acquisition of Activision Blizzard, new titles such as Call of Duty were introduced, but only to the higher-priced tiers. This move aims to recoup the giant's enormous investment but has drawn scrutiny for its impact on the existing user base.