FTC believes Microsoft pushing users to pricier or inferior Xbox Game Pass tiers

The Federal Trade Commission (FTC) and Microsoft’s long-lasting saga seem to never reach its end. The Redmond tech giant, which has just recently raised its Xbox Game Pass prices, caught another stray from the US regulator.

The FTC criticized the recent change that also introduces a new Game Pass Standard tier that lacks Day One access to first-party games. In the regulator’s filing to the US Court of Appeals for the Ninth Circuit dated July 18, 2024, the FTC criticizes and describes the new tier as a “degraded product.”

“Product degradation—removing the most valuable games from Microsoft’s new service—combined with price increases for existing users, is exactly the sort of consumer harm from the merger the FTC has alleged,” the document reads.

The Xbox Game Pass Standard plan costs $14.99 with no day-one access, compared to the $10.99 for the Xbox Game Pass Console with such access. Microsoft has previously raised the Game Pass Ultimate price from $16.99 to $19.99 per month and discontinued the Console Game Pass, pushing users to switch to a more expensive or less valuable service.

These changes reduce product quality and increase costs, which the FTC says harms consumers and shows Microsoft’s market power post-merger. As mentioned in the document, the FTC believes that this contradicts Microsoft’s earlier promises that adding Call of Duty to Game Pass wouldn’t raise prices.

“Microsoft’s price increases and product degradation—combined with Microsoft’s reduced investments in output and product quality via employee layoffs … —are the hallmarks of a firm exercising market power post-merger,” the document continues.