Microsoft has decided to formally respond to the criticisms and the charges brought by the US Federal Trade Commissionwho pointed the finger at Xbox Game Pass Price Hike and the new Standard tier of the service.
More specifically, the FTC filed a document with the U.S. Court of Appeals yesterday stating that the price increase is the “harm to consumers” which he wanted to avoid by preventing the acquisition of Activision Blizzard. Not only that, he defined the new Standard tier of Game Pass (which will replace the console one and will not include day one games, despite the higher price) as an element that “degrades the product” and in contrast with Microsoft’s promise to bring Call of Duty to Game Pass on day one with no price increase.
Microsoft’s response
Microsoft in turn has filed a formal letter in the last few hours, in which it responds to the FTC’s criticisms. As regards Xbox Game Pass Standardstates that This is not a “degraded” version of the Console tieras it includes online multiplayer (absent in the previous level), which subscribers previously had to purchase separately.
“Microsoft is offering a new tier of service, Game Pass Standard, that offers access to hundreds of games in the catalog and multiplayer functionality for $14.99 per month. It is wrong to call this service a “degraded” version of the Game Pass offering for consoles, which has been discontinued. That product did not offer multiplayer functionalitywhich had to be purchased separately for an additional $9.99 per month (making the total cost $20.98 per month).”
Microsoft then talked about the price increase for Ultimate, justifying it with the qualitative and quantitative increase represented by the new upcoming games, including Call of Duty. “While the price of Game Pass Ultimate will increase from $16.99 to $19.99/month, the service will offer more value thanks to several new games available day-and-date. Among them is the upcoming release of Call of Duty, which has never been available on a subscription basis before.”
Finally, the lawyers of the Redmond giant have took a dig at the FTCstating that Game Pass as such has never been criticized by antitrust, given that the focus of the lawsuit that was supposed to prevent Activision Blizzard’s acquisition revolved around the theory of a possible Xbox monopoly in the console market through Call of Duty. “The FTC barely mentioned the underwriting during the trialinstead focusing on the theory that Microsoft withdrew Call of Duty from Sony’s console. The district court correctly rejected that theory, which is not further eroded by Microsoft and Sony’s 10-year agreement to keep Call of Duty on the PlayStation.”
“Aside from the fact that it is normal for companies to change their service offerings over time, the FTC’s argument in all of its putative markets has consistently been based on vertical foreclosure, that is, that Microsoft would take Call of Duty away from rivals and thereby harm competition.”
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