‘A firm exercising market power post-merger’: Microsoft confronted by FTC for Xbox Game Pass price hike

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As a long-time Xbox gamer and follower of Microsoft’s gaming industry moves, I can’t help but feel disappointed and frustrated by the recent developments surrounding Xbox Game Pass and the FTC’s cautionary report.

The Federal Trade Commission (FTC) has recently warned the US Court of Appeals about Microsoft’s price increases for Xbox Game Pass, stating that such actions demonstrate Microsoft’s use of market dominance following a merger.

Last week, Microsoft announced plans to raise Xbox Game Pass prices and replace cheaper tiers with a less robust version, as labeled by the Federal Trade Commission (FTC). The FTC contends that this combination of removing popular games (or “degrading” the product) and hiking up fees for current users constitutes consumer harm resulting from the merger.

Microsoft’s actions following the closure of Tango Gameworks and additional Xbox layoffs have raised concerns. The Federal Trade Commission (FTC) has stated that these events, along with Microsoft’s “price hikes and diminished product quality,” suggest that the company is misusing its market power after the merger.

As a passionate gamer, I’m thrilled about the addition of Call of Duty to Game Pass. However, the timing of this release in relation to Microsoft’s previous pricing changes raises some concerns. You see, I had been counting on Microsoft’s promise that the acquisition would not result in any price hike for Game Pass or a delay in making CoD available day-and-date with console releases. But now, with Call of Duty joining Game Pass, it seems that something may have shifted behind the scenes.

The proposed takeover of Activison by Microsoft had drawn significant public attention for quite some time. However, the deal was put on hold for nearly a year before ultimately receiving the green light from the CMA. Perhaps they hadn’t anticipated Microsoft going back on its commitments in such a way.

Cover image via FOX(Pexels)

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2024-07-19 13:40