Key Takeaways
1. Consumer Concerns Post-Acquisition: Former FTC chair Lina Khan raised alarms about rising prices and market consolidation after Microsoft’s acquisition of Activision Blizzard.
2. Xbox Game Pass Price Increases: Following the acquisition, Xbox Game Pass subscription fees have increased significantly, contradicting Microsoft’s earlier promises during court hearings.
3. Impact of Market Power: Khan suggested that Microsoft’s strong market position may lead to indifference toward customer concerns, highlighting a “too big to care” mentality.
4. Counterarguments from Microsoft Supporters: Supporters argue that some FTC predictions, like Microsoft disadvantaging rivals, have not materialized, with games like Call of Duty remaining accessible on PlayStation.
5. Wider Industry Pricing Issues: Other companies like PlayStation and Nintendo are also facing criticism for price hikes, indicating broader issues in the gaming market beyond just Microsoft.
After Microsoft took over Activision Blizzard in 2023, some gamers were happy about the bigger Xbox games library. Yet, former FTC chair Lina Khan raised worries about how this deal might affect consumers. After another price hike for Xbox Game Pass, Khan shared her thoughts on social media, reminding people of the FTC’s unsuccessful attempt to challenge the agreement in court.
Rising Prices and Market Concerns
Khan responded to a tweet by Lee Hepner, who pointed out the increasing subscription fees for Game Pass. She highlighted that, since the acquisition, some studios have shut down and prices for certain products have shot up. Khan stated, “increasing market consolidation and increasing prices often go hand-in-hand.” With Microsoft’s strong position in the market, it’s like they are “too big to care” about the adverse effects on customers.
Microsoft’s Promises Under Scrutiny
Critics often reference a promise made by Microsoft during the 2023 court hearings, where they denied that the acquisition would cause Xbox Game Pass prices to rise. Now, just a couple of years later, the Ultimate tier costs $29.99 monthly, while the lower tiers offer less value. Analysts attribute these high prices to the merger and some poor decisions, especially when paired with expensive Xbox consoles.
Khan was right about many consequences stemming from the Activision Blizzard deal. However, supporters of Microsoft might argue that some predictions from the FTC have not come true. The U.S. agency feared that Microsoft could misuse its power to disadvantage rivals like PlayStation. Instead, games such as Call of Duty are more accessible on the PS5, rather than becoming exclusive to Xbox.
PlayStation’s Pricing Issues
PlayStation has also been accused of engaging in anti-competitive behavior. Consumer advocates claim that the PS Store prevents competitors from offering lower-priced digital games. While it’s unclear if tariffs are entirely responsible, Sony has raised the prices for PlayStation Plus subscriptions and PS5 systems as well.
On the other hand, Nintendo is selling the original Switch along with new games and accessories at elevated MSRPs. Still, right now, the bulk of consumer frustration seems to be directed at Microsoft.
Lina Khan’s X account
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