Ex-FTC Chair Blasts Microsoft as Xbox Game Pass Ultimate Price Hikes Hit Players

Microsoft just raised the Xbox Game Pass Ultimate price to $30 a month, a 50% hike that’s landed right as criticism from the US Federal Trade Commission’s former chair heats up. Lina Khan, who fought to block last year’s blockbuster Activision Blizzard acquisition, is calling out the company for what she says is a direct hit against both players and developers.

This week’s price jump is just the latest in a series of increases for Xbox users. It comes on the heels of recent Xbox console price bumps in the US, and arrives less than two years after Microsoft’s historic $69 billion deal to bring Activision Blizzard (home to Call of Duty) under its wing.

Promises Broken, Prices Climb

Not long ago, Microsoft told a court that scooping up Activision Blizzard wouldn’t raise Game Pass prices. That was the company’s line in March 2023, as part of its testimony while fending off the FTC’s legal push to block the deal. Still, less than two years after that courtroom assurance, subscribers are being asked to pay half again as much for the top tier of the service.

Lina Khan took to social media directly after the new price announcement, highlighting that Microsoft’s acquisition has been, in her words, “followed by significant price hikes and layoffs, harming both gamers and developers.” She didn’t stop there, warning that industry consolidation means major players can get “too-big-to-care” about their customers and jack up prices without consequence.

The results aren’t just theoretical. Since Microsoft’s acquisition, the company has orchestrated significant layoffs within its gaming division, adding to the sense that those working on these blockbuster titles are also feeling the squeeze.

Behind the Numbers: Why the Price Hike, and Who’s Paying?

A Bloomberg report adds more context to the timing. According to a former Microsoft employee, Xbox gave up “more than $300 million in sales” last year on consoles and PC, specifically around Call of Duty, the very franchise at the core of the Activision purchase. That lost revenue from not traditionally selling the game looks to be a factor in forcing pricing changes elsewhere.

It’s not just Game Pass seeing increases. Xbox hardware itself has gone up in price multiple times this year alone, with the most recent hike announced last week for US customers. All this, after Microsoft’s president, Brad Smith, hailed the court’s decision to let the Activision Blizzard buyout proceed as “a victory for players across the country and for common sense in Washington, D.C.”

But for many, including those at the FTC, that “victory” now looks far more complicated. The FTC’s appeal to stop the deal was thrown out earlier this year. The commission has officially given up the fight, exiting as the combined company quickly cut jobs and asked users to pay more for their subscriptions.

The addition of Activision Blizzard’s giant portfolio, most notably Call of Duty, has been a major financial boost for Microsoft, but that success hasn’t trickled down to price relief or job stability for those who play or make games on Xbox.

As Lina Khan puts it, gamers and developers are the ones paying the price. If these changes are a sign of where industry consolidation leads, those still holding out hope for long-term benefits may want to pay attention.