Recently, Microsoft faced criticism from the US Federal Trade Commission (FTC) after hiking the prices of its Xbox Game Pass and introducing a new tier of the popular game subscription service. The new tier, known as Xbox Game Pass Standard, provides players with a vast library of titles and all the benefits of the Game Pass Core, with the exception of new first-party titles on the day of release. The FTC labeled this new tier as “degraded” in a court filing, prompting Microsoft to respond to the allegations.
In a court filing, Microsoft defended its decision, stating that the discontinued Game Pass for Console tier did not offer multiplayer functionality without an additional purchase. The new Xbox Game Pass Standard tier, priced at $14.99 per month, offers access to hundreds of games and online multiplayer, while the Ultimate tier promises new titles like Call of Duty: Black Ops 6 on the day of release. Microsoft argued that the new tier actually provides more value to players compared to the previous offerings.
Despite Microsoft’s explanation, the FTC maintained its position that the new Standard tier is a “degraded” product. The FTC argued that the increased cost of the Standard tier, which is 36% more expensive than the previous Console Game Pass, coupled with the absence of day-one releases, constitutes consumer harm. The FTC raised concerns about the removal of valuable games from the service and pointed to Microsoft’s merger with Activision Blizzard as a potential source of degradation in the Game Pass subscription.
Moreover, the FTC criticized Microsoft for failing to address the issue of consumer harm adequately during the trial over the company’s acquisition of Call of Duty maker Activision Blizzard. The regulatory body accused Microsoft of providing a misleading account of the facts surrounding the new Game Pass tier and its impact on consumers. Despite Microsoft’s assertion that businesses often evolve their service offerings, the FTC remained unconvinced of the benefits of the new Standard tier.
In response to the criticism, Microsoft drew a comparison with Sony’s PlayStation Plus game subscription service, which has continued to thrive despite offering only a limited number of titles at launch. Microsoft highlighted the success of Sony’s subscription model to emphasize that changes in service offerings are not uncommon in the gaming industry. By pointing to Sony’s approach, Microsoft sought to justify its decision to introduce the new tier and adjust the prices of its existing Game Pass offerings.
Microsoft’s decision to raise the prices of Game Pass Ultimate, Xbox Game Pass Core, and PC Game Pass, while discontinuing Game Pass for console for new subscribers, reflects the company’s strategy to adapt to changing market dynamics. As the gaming landscape evolves, subscription services like Xbox Game Pass play a crucial role in engaging players and expanding the reach of gaming content. Despite the controversy surrounding the new tier, Microsoft remains committed to providing a diverse range of gaming experiences to its subscribers.
Leave a Reply