Says Microsoft’s monopoly position is hurting Xbox gamers

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In January 2022, Microsoft announced that it would buy gaming giant Activision Blizzard. There were many objections to this purchase, especially from Sony. But market watchdogs also feared that such a big player could emerge in the gaming market that it would be detrimental to customers. In October 2023, the deal went through anyway for $75.4 billion. But one authority still doesn’t want to accept that. It criticizes the price increases in the Xbox Game Pass.

Who wants to reverse the deal? The Federal Trade Commission (FTC) is an independent federal agency in the USA. The agency’s job is to combat unfair practices in order to ensure that a market functions through healthy competition between companies.

It is, so to speak, the antitrust authority of the USA.

The FTC sees this as a problem with the deal: The FTC had already objected to the deal in December 2022, sued against it and filed an appeal with the Court of Appeals after the lawsuit failed.

In February 2024, their objection to how damaging the deal was was confirmed when Microsoft cut 2,000 jobs at Activision Blizzard.

Now they feel their objections are once again justified. They believe that Microsoft is exploiting its now dominant position in the market to increase the prices of the Xbox Game Pass.

Call of Duty is always the bone of contention in the deal:

Call of Duty Modern Warfare 3 Season 2 Multiplayer Trailer

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US authorities see actual price increase in Xbox Game Pass of up to 81%

This is their new complaint: In a submission to the Court of Appeal dated 18 July it now says (via twitter):

  • Microsoft is increasing its prices from $16.99 to $19.99 per month – a price increase of 17%
  • In addition, the Console Game Pass would be discontinued for €10.99 and people would be switched to a Game Pass Ultimate – which means a price increase of 81%
  • Or people could switch to a “Game Pass Standard” for $14.99 – that would be a price increase of 36% and you would be switching to a worse product because it would lack the day-one releases, the “most valuable games.”

    • The FTC says: These price increases and the layoffs of employees are clear signs that the company is taking advantage of the market power it has gained through the merger. They also do not match the statements Microsoft has made previously.

    They said that the merger would benefit customers, because Xbox Game Pass customers would be able to play the new Call of Duty (from Activision Blizzard) on day 1 – without a price increase.

    That is no longer the case because you can only play the new CoD if you pay the increased price.

    Will Activision Blizzard be released again?

    What happens next? We don’t know. It’s unclear when the appeals court will decide and what a ruling might mean.

    A “reversal of a merger” is very rare (via polygon). In 2009, two grocery chains merged and lost the appeal. Ultimately, they had to give up 32 stores and a brand name.

    The purchase of Activision Blizzard by Microsoft is probably one of the most important topics in gaming in the last 10 years. The FTC is still fighting against it. You can read more background information on the FTC’s fight and the disadvantages that the deal also brings for employees here: Authority says: Microsoft lied to them – do they have to release Activision Blizzard again?

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