As Xbox raises Game Pass prices, former FTC chair says it warned Activision deal would ‘harm gamers’
Microsoft’s Activision deal ‘has been followed by significant price hikes and layoffs’
The former chair of the Federal Trade Commission (FTC), who fought to block its 2023 acquisition of Activision Blizzard, has criticized Microsoft’s decision to raise Game Pass prices.
Earlier this week, Microsoft announced a 50% price increase to Xbox Game Pass Ultimate, taking its highest tier to $30 / £23 a month.
Microsoft’s Xbox consoles have also seen a series of price increases in recent months, the latest coming last week when the company announced that it would once again raise prices in the US.
Since the completion of the Activision Blizzard deal in 2023, Microsoft has also laid off thousands of staff, including in its gaming business.
According to a new Bloomberg report, the Game Pass price rises come after Xbox gave up “more than $300 million in sales” of Call of Duty on console and PCs last year, according to a former employee.
Lina Khan, who was the chair of the FTC from 2021 until earlier this year, took to social media after the Game Pass news, quoting a post which noted that, in March 2023, Microsoft told a court that Game Pass prices would not increase as a result of its Activision Blizzard acquisition.
“Microsoft’s acquisition of Activision has been followed by significant price hikes and layoffs, harming both gamers and developers,” Khan wrote. “As we’ve seen across sectors, increasing market consolidation and increasing prices often go hand-in-hand.
“As dominant firms become too-big-to-care, they can make things worse for their customers without having to worry about the consequences.”
Microsoft completed the games industry’s biggest ever deal in October 2023, after the US District Court for the Northern District of California denied the FTC’s motion for a preliminary injunction, allowing the acquisition to be completed.
The FTC proceeded with an appeal in December 2023, attempting to overturn the court’s decision. Earlier this year, that appeal was rejected, and the Commission officially dropped the case entirely.
At the time, Microsoft president Brad Smith called the decision “a victory for players across the country and for common sense in Washington, D.C.”
Since the Activision Blizzard deal was completed, the addition of the Call of Duty giant has boosted Microsoft’s earnings significantly, but it was also followed by a significant number of layoffs.
