FTC says Xbox Game Pass price hikes are “product degradation”

The FTC doesn't like Xbox Game Pass Standard.

The US’ Federal Trade Commission (FTC) has taken issue with Xbox Game Pass price hikes in a filing submitted to the US Court of Appeals for the Ninth Circuit earlier this week.

Ahead of the filing, Xbox told its customers that Game Pass would see sweeping changes in September, including a new Xbox Game Pass Standard tier (without day-one titles) alongside price increases for every tier of Game Pass, including Xbox Game Pass Ultimate and PC Game Pass.

In its filing, the FTC called the new tier and price increases a sign of “product degradation”.

“[Game Pass Standard] costs 36% more than Console Game Pass, and withholds day-one releases,” reads a portion of the filing. “Product degradation—removing the most valuable games from Microsoft’s new service—combined with price increases for existing users, is exactly the sort of consumer harm from the merger the FTC has alleged.

“Microsoft’s price increases and product degradation—combined with Microsoft’s reduced investments in output and product quality via employee layoffs[…]—are the hallmarks of a firm exercising market power post-merger,” the FTC continued.

The FTC has said the price increases are also “inconsistent” with the case Microsoft made against the FTC in legal proceedings last year.

We’ll keep you up to date on the situation as it develops.