Update July 22nd 10:04AM: Microsoft has responded to the FTC's claims, calling them "a misleading, extra-record account of the facts" and accusing the commission of attempting to "reinvent its case on appeal".
In its response (spotted by The Verge's Tom Warren), Microsoft, via law firm Wilkinson Stekloff, says it's "wrong" to call Game Pass Standard "degraded" because the new tier features multiplayer privileges, which Game Pass for Console did not.
Additionally, Microsoft says that the FTC is attempting to "shift focus" to a new line of attack, but that Xbox Game Pass "continues to benefit competition and consumers", so the commission's claims are false. Original story follows below.
Original story: The FTC has branded Microsoft's new Xbox Game Pass Standard tier a "degraded product", suggesting that recent Game Pass changes are hallmarks of a company "exercising market power post-merger".
In a US Court of Appeals filing (via The Verge's Tom Warren), the FTC describes the new Game Pass Standard tier, which omits day-one releases from its lineup, as "product degradation" and "exactly the sort of consumer harm from the merger the FTC has alleged".
As the FTC's filing points out, the Standard tier's $14.99-per-month cost represents an increase of 36% over the now-retired Console tier's $10.99, but it offers fewer benefits thanks to its omission of day-one titles.
The FTC's filing goes on to say that Microsoft's "price increases and product degradation", combined with the "reduced investments in output and product quality" represented by recent layoffs, are an example of the company flexing its market muscle post-Activision Blizzard merger.
Additionally, the FTC says the introduction of this new tier, as well as the Game Pass price increases, are inconsistent with previous assurances made by Microsoft regarding Call of Duty and its availability on the subscription service.
According to the FTC, Microsoft previously stated that the Activision-Blizzard merger would allow the company to make the latest Call of Duty game available on Game Pass on day one with "no price increase" as a result of said decision.
The timing of this announcement, and the discontinuation of the Game Pass Console tier, are very close indeed to the launch of Call of Duty: Black Ops 6, and the FTC isn't happy about what that might represent.
It's been something of a rough year for Xbox so far, especially when it comes to the court of public opinion.
These Game Pass changes haven't exactly proven popular, and they follow hot on the heels of the closure of two major studios in the form of Tango Gameworks and Arkane Austin.
That's despite the fact that the former's Hi-Fi Rush was, according to Xbox exec Aaron Greenberg, a "breakout hit", leading to questions regarding exactly what a studio has to do to be considered "successful" in the modern era of gaming.
Those closures became especially galling shortly after they were announced, when Xbox head Matt Booty suggested the brand needed "smaller games" that attract "prestige and awards", a description that most certainly applies to Hi-Fi Rush.
In any case, we'll have to wait and see where this newest battle between the FTC and Microsoft goes. Stay tuned for more.
