Disputes between Microsoft and the Federal Trade Commission (FTC) resurfaced this week. The regulator criticized the tech giant for the price increase of Xbox Game Pass following the acquisition of Activision Blizzard, claiming that the service is a “degraded product.”
The FTC believes that Microsoft’s move is a demonstration of its newfound power in the industry and will harm both service users and competitors. In response, the tech giant did not remain idle and sent its reply to the FTC.
In it, Microsoft argues that the statements about Xbox Game Pass are misleading. Additionally, it explained and justified the price increase for its popular subscription service.
Microsoft Defends Xbox Game Pass Changes to the FTC
In response to the FTC’s allegations, Microsoft stated that the recent changes to Xbox Game Pass do not harm competition or users. It argued that the regulator’s statements are misleading as they do not provide a complete picture of the situation.
Microsoft defended the new Xbox Game Pass Standard plan and claimed that it is not a degraded product, as it offers online multiplayer gaming, which was not previously included in the console plan that is being discontinued.
“It is wrong to call this [Xbox Game Pass Standard] a degraded version of the discontinued Game Pass for Console offering. That discontinued product did not offer multiplayer functionality, which had to be purchased separately for an additional $9.99/month (making the total cost $20.98/month),” the company stated.
Regarding the price increase for Xbox Game Pass Ultimate, Microsoft claimed that the service will offer more value due to the new games that will be added to the catalog on day one. It boasted that Call of Duty will be one of them, a series that has never debuted under this business model before.
“Setting aside that it is common for businesses to change service offerings over time, the FTC’s case in all of its alleged markets has always been premised on vertical foreclosure, i.e., that Microsoft would withhold Call of Duty from rivals and therefore harm competition. But even in the alleged subscription market, Call of Duty is not being withheld from anyone who wants it,” the company added.
A few months ago, the FTC did everything possible to delay and stop the purchase of Activision Blizzard. Along with the UK’s Competition and Markets Authority (CMA), it was one of the main opponents of the acquisition, arguing that it would harm players and other companies in the industry.
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