On Wednesday, the Federal Commerce Fee pointed to Microsoft’s current pricing overhaul of Xbox Recreation Move 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 searching 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 remaining choice from these justices, the FTC’s been submitting further proof to assist its claims that the merger would damage competitors in gaming and damage clients, together with a letter from earlier this yr after Microsoft laid off almost 2,000 workers throughout the newly acquired groups.
Right now’s letter (through Video games Fray) tries to make use of Microsoft’s current messy modifications to Recreation Move to assist its case, pointing to the truth that Recreation Move for Console goes away for brand spanking new and lapsed subscribers and can be changed by a costlier “Normal” 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 Move Final subscription, which is now $20 a month, will embody entry to all Recreation Move video games.
“Microsoft’s worth will increase and product degradation—mixed with Microsoft’s lowered 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 in the course of the trial final summer time suggesting Recreation Move wouldn’t get costlier simply because Activision Blizzard’s video games had been added to it.
“Right here, the acquisition would profit customers by making [Call of Duty] accessible on Microsoft’s Recreation Move on the day it’s launched on console (with no worth enhance for the service based mostly on the acquisition),” the corporate wrote on the time. That particular quote made the rounds on a number of web sites, and has since gave the impression to be contradicted by this month’s steep worth will increase, although Microsoft might most likely attempt to argue that it wasn’t the acquisition immediately 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 remaining choice within the attraction can be issued, and it’s onerous to fathom what the implications can be if Microsoft ended up shedding. It will little doubt be even messier and extra complicated than its Recreation Move overhaul.
