- According to findings last month by the Competition and Markets Authority, it was suggested that Microsoft would have the incentive to revise subscription costs after the merger took place.
- In their latest response, Microsoft has expressly stated that there are no intentions to increase the costs as a result of the merger.
- Microsoft suggests that any benefit from a price increase resulting from the addition of Call of Duty on Game Pass would only be for the short term.
In a response given to the CMA findings, Microsoft has quelled any doubts regarding a possible price increase for Xbox Game Pass. Last month, the Competition and Markets Authority suggested that Microsoft could potentially increase the price of their Game Pass subscription service following the inclusion of high-profile Activision titles on the system.
Prices for subscriptions can easily be revised, and Microsoft may have an incentive to do so once it adds content that is as popular as Activision’s, including CoD.”
In Microsoft’s response, it is stated that,
Game Pass prices will not increase as a result of the Merger, and certainly
will not increase to a point that offsets the substantial benefits of Activision
titles coming to Game Pass on a day and date basis. This is especially so
given Game Pass will continue to be constrained by B2P (Buy to Play).”
It further states,
In order to increase output Microsoft will need to offer Game Pass at a lower quality-adjusted price. This is exactly what Microsoft has done when it has added content to Game Pass in the past with, for example, the ZeniMax transaction resulting in additional content but no increase in Game Pass subscription prices.”
The response further states that an increase in price for Game Pass concerning the Activision merger would affect all players that do not value or play Call of Duty and that the annual release cycle of Call of Duty would ensure only a short-term benefit.
As CoD titles are only released once a year, any impact would be short-lived as gamers who exhaust their enthusiasm for the new version of
CoD within a few months will churn because of the higher price. As such, any
price increase would be counter-productive as it would increase subscriber
Furthermore, the response also continues to mention that the merger would push Microsoft’s competitor Sony to improve their subscription service with lower prices or better value for subscribers, referring to the variations of their PlayStation Plus services. Since the start, however, Sony has strongly opposed this merger, constantly throwing hurdles to have the merger canceled.
By enabling Microsoft to compete more effectively against Sony, the Merger can also be expected to push Sony to improve its subscription offering, to the benefit of its more than 46 million subscribers, which would in turn result in lower prices, higher quality, and/or greater choice for console customers.”
However, concerning the price increase, this statement is at odds with a prior announcement by Xbox Game Studios CEO Phil Spencer that said a Game Pass price hike could be imminent in the near future.
Another discrepancy that comes to notice here is that Call of Duty is no longer an annual franchise, the series has ditched its annual format after the disappointing release of Call of Duty Vanguard and with the launch of Call of Duty Modern Warfare 2. The statuary deadline is on April 26 when the final report will be published, and the merger would finally be settled.
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