When Microsoft announced its intentions to acquire Activision Blizzard King in early 2022 to be part of its Microsoft Gaming and Xbox line, some regulatory entities in certain countries such as the United Kingdom (CMA) and the United States (FTC) did everything possible to stop the purchase for $69 billion dollars to avoid a monopoly in the gaming industry.
Despite this, Microsoft completed the acquisition in late 2023, causing a number of changes to Microsoft Gaming such as the arrival of games like Diablo 4, la saga Call of Duty and soon Other Activision Blizzard games to its Xbox Game Pass subscription service.
Clearly, adding this new series of big-name games caused a price increase to the subscription service, and now the Federal Trade Commission (FTC) has rated Game Pass price increases recently announced by Microsoft as “exactly the kind of consumer harm” they were trying to stop by opposing the acquisition.
FTC sends appeal letter to reverse Xbox acquisition
“The product degradation (the removal of the most valuable games from Microsoft’s new service), combined with price increases for existing users, is exactly the type of consumer harm that the FTC has alleged will result from the merger,” wrote in a letter to the U.S. Court of Appeals.
“Microsoft’s price increases and product degradation, combined with Microsoft’s reduced investments in production and product quality through employee layoffs, are the hallmarks of a company exercising market power post-merger.”
The FTC’s letter goes on to note that “Microsoft’s price increases coincide with the addition of Call of Duty to the most expensive tier of Game Pass, and the discontinuation of the console tier will occur shortly before the launch of the newest CoD game.”
It notes that, “Microsoft promised that ‘the acquisition would benefit consumers by making [CoD] “be available on Microsoft Game Pass on the day of its console launch (with no price increase for the service based on acquisition).”
The agency concludes by stating that Microsoft’s post-merger actions vindicate its previous skepticism about the promises it made regarding Game Pass.
Microsoft lawyers later responded to the FTC’s complaint, saying its “factual statements are incomplete and misleading.”
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2024-07-23 06:35:20
