On Wednesday, the Federal Commerce Fee pointed to Microsoft’s latest pricing overhaul of Xbox Recreation Go as proof of the hurt its merger with Activision Blizzard has had on customers. The company filed a brand new letter in its ongoing attraction of final yr’s deal, calling the modifications “precisely the form of shopper hurt from the merger that the FTC alleged.”
Regardless of shedding its lawsuit looking for an injunction to freeze Microsoft’s buy of Activision Blizzard in July 2023, the FTC appealed the choice with the U.S. Court docket of Appeals for the Ninth Circuit. Whereas it awaits a closing resolution from these justices, the FTC’s been submitting further proof to help its claims that the merger would harm competitors in gaming and harm clients, together with a letter from earlier this yr after Microsoft laid off almost 2,000 staff throughout the newly acquired groups.
Right now’s letter (through Video games Fray) tries to make use of Microsoft’s latest messy modifications to Recreation Go to help its case, pointing to the truth that Recreation Go for Console goes away for brand new and lapsed subscribers and will probably be changed by a dearer “Commonplace” bundle that doesn’t embody day-one releases like this fall’s Name of Obligation: Black Ops 6, acquired as a part of the Activision deal. The result’s that solely the Recreation Go Final subscription, which is now $20 a month, will embody entry to all Recreation Go video games.
“Microsoft’s worth will increase and product degradation—mixed with Microsoft’s decreased investments in output and product high quality through worker layoffs, see FTC’s February 7, 2024, Letter—are the hallmarks of a agency exercising market energy post-merger,” the FTC writes. It additionally factors to an announcement Microsoft made in its filings throughout the trial final summer time suggesting Recreation Go wouldn’t get dearer simply because Activision Blizzard’s video games had been added to it.
“Right here, the acquisition would profit customers by making [Call of Duty] out there on Microsoft’s Recreation Go on the day it’s launched on console (with no worth improve for the service primarily based on the acquisition),” the corporate wrote on the time. That particular quote made the rounds on a number of web sites, and has since seemed to be contradicted by this month’s steep worth will increase, although Microsoft might in all probability attempt to argue that it wasn’t the acquisition straight that spurred the overhaul however a bigger technique shift round its subscription service enterprise.
“Microsoft’s post-merger actions thus vindicate the congressional design of preliminarily halting mergers to completely consider their probably aggressive results, and judicial skepticism of guarantees inconsistent with a agency’s financial incentives,” the FTC’s letter concludes. It’s not clear when a closing resolution within the attraction will probably be issued, and it’s arduous to fathom what the results could be if Microsoft ended up shedding. It might little question be even messier and extra complicated than its Recreation Go overhaul.
