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FTC Attacks Microsoft's Post-Merger Game Pass Price Increases (arstechnica.com) 15
The FTC says the across-the-board price increases that Microsoft recently announced for its Xbox Game Pass subscription service tiers represent "exactly the sort of consumer harm from the merger the FTC has alleged" when it sought to block Microsoft's merger with Activision. From a report: In a letter to the court posted as part of an ongoing appeal by the FTC in the case, the federal regulator alleges Microsoft's moves are a clear example of "product degradation" brought about by "a firm exercising market power post-merger." The letter's primary focus is on the soon-to-be-discontinued $10.99/month Console Game Pass tier. That's being replaced with a $14.99/month Game Pass Standard tier (a 36 percent price increase) that no longer includes "day one" access to all of Microsoft's first-party titles. To maintain that key benefit, "Console" subscribers will have to spend 81 percent more for the $19.99 Game Pass Ultimate tier, which also includes a number of additional benefits over the current $10.99/month option.
The FTC notes that these changes "coincide with adding Call of Duty to Game Pass's most expensive tier." Previously, Microsoft publicly promised that this Game Pass access to Activision's ultra-popular shooter would come "with no price increase for the service based on the acquisition." It's that "based on the acquisition" clause that's likely to give Microsoft some wiggle room in arguing for its planned pricing changes. Inflation is also a sufficient explanation for a large portion of the price increase in nominal terms -- the $14.99 Microsoft charged for a month of Game Pass Ultimate when it launched in 2019 is the equivalent of $18.39 today, according to the BLS CPI calculator.
The FTC notes that these changes "coincide with adding Call of Duty to Game Pass's most expensive tier." Previously, Microsoft publicly promised that this Game Pass access to Activision's ultra-popular shooter would come "with no price increase for the service based on the acquisition." It's that "based on the acquisition" clause that's likely to give Microsoft some wiggle room in arguing for its planned pricing changes. Inflation is also a sufficient explanation for a large portion of the price increase in nominal terms -- the $14.99 Microsoft charged for a month of Game Pass Ultimate when it launched in 2019 is the equivalent of $18.39 today, according to the BLS CPI calculator.
Shocked, SHOCKED! (Score:2)
Who would have thought removing competition would lead to higher prices for consumers?
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How did MS buying Activision reduce competition for Game Pass like services? AFAIK Activision did not have a service like that.
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You had other routes to buy the Activision games I'm guessing.
As a PC user with Steam, I don't directly feel winds of anti-competition blowing through the console market.
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But you still have those same routes to buy Activision games - Game Pass isn't even about buying games (it's like Netflix - you pay a recurring subscription fee and get access to a rotating selection of titles). The only connection between Game Pass and buying games is that IIRC Game Pass subscribers also get a discount on buying any titles on Game Pass (i.e. if a title is leaving, which they announce in advance, you can go ahead and buy it).
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Competition? You mean Sony which is charging more than Game Pass and offering less? You know what happens when a competitor succeeds offering a worst product for more money right? Prices go up.
All that's happened is Microsoft raised their prices to match Sony's and offer the same product Sony offers. The only thing Microsoft offers is day one game access if you pay a little more money.
The competition spoke - you don't have
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So you concede Microsoft is raising prices and lowering the quality of their product after removing direct competition? But somehow that is OK because there are even more expensive option and worse things Microsoft is doing. A truly bizarre argument.
I'm dropping Games Pass (Score:3)
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While I understand the ire... i don't understand the economics. How does an increase of a couple of dollars a month destroy the value proposition here? Even at the higher rate, the dollar-per-entertainment-hour is pretty terrific.
Saying it doesn't make sense for you at all is absolutely defensible. I dropped game pass. Not because I didn't find it worth the money - it absolutely was. It's just that gaming dropped too low in my priority list to bother. But saying the increase tips the scales seems dodgy.
The deluxe service is now $20 (Score:4, Interesting)
While I understand the ire... i don't understand the economics. How does an increase of a couple of dollars a month destroy the value proposition here? Even at the higher rate, the dollar-per-entertainment-hour is pretty terrific.
Saying it doesn't make sense for you at all is absolutely defensible. I dropped game pass. Not because I didn't find it worth the money - it absolutely was. It's just that gaming dropped too low in my priority list to bother. But saying the increase tips the scales seems dodgy.
If I didn't have kids, yeah, I might consider it, but really most of the games I want aren't on there and the few that I really like on there are old and I've played them many times. I like the Steam model where I buy the exact game I want when it's on sale at a reasonable price. So this is as much about my life and being too busy...at $10/month...good price...$16/month...I justified it because my kid wanted a few games on the PC....$20/month?...nope..I've gone almost 2 months without touching my XBox...and got annoyed there there so many cool looking PS5 exclusives.
not sure if I'm old or game are less fun than they were a few years ago, but I am honestly underwhelmed by all but a few releases recently...the shooters I love seem to be out of fashion and the few that get made are mostly dull flops that don't sell well.....but that's specific to me...what is more universal is...
it's also annoying that MS is buying up these studios and raising the prices while bragging about their profits. Also, as anyone who has been on the Games pass for a long time will tell you...you enjoy a game, it's a ton of fun...but they rotate fairly quickly unless they're owned by MS or EA....so you end up having to buy it eventually anyway unless you time things perfectly.
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Well described and a very solid examination. Well put.
Ultimately I always defend, "I don't want to!" as an honest, valid, and forthright reason for opting out. Just as, "because I want to!" Is a great reason to opt in. It doesn't need elaboration.
You describe the circumstances aligning so that you looked at it all and said, "Nope." In their totality, they put you off. The math is incidental.
I like it.
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but this is a huge fuck up.
Hardly. You not finding the value in it more means it wasn't a product targeted at you in the first place. Seriously $15/month = 180/year. Most casual gamers who play different games (as opposed to those who clock in 3000+ hours on a single game) will easily go through $180 worth of game titles in a year. I'm not a big gamer, but I'm already 3 AAA titles down this year, so I'm very close to the edge of that $180 already, and there's still 6 months to go. Caveat: I don't need day 1 access to games. I just ne
a new car! (Score:2)
well if they don't raise prices, somebody's daughter will have to wait until NEXT year to hget her new car.
Heavens forbid!
FTC has no point here (Score:2)
Given how Activision had no competing product to Game Pass the merger here has been completely irrelevant. Microsoft isn't competing with less people now than it was before.