Microsoft Says Game Pass Price Won't Increase Following Activision Deal Approval - News
by William D'Angelo , posted on 08 March 2023 / 5,473 Views
The UK regulators, the Competition and Markets Authority (CMA), has shown some concerns that Microsoft could raise the price of its Xbox Game Pass subscription service following the approval of Microsoft's Activision Blizzard deal and the games from the gaming giant being added to the services.
Microsoft in a response published by the CMA says it has no plans to raise the price of Xbox Game Pass following the Activision Blizzard deal being approved.
"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," reads Microsoft's response (via a transcription by VideoGamesChronicle). "This is especially so given Game Pass will continue to be constrained by B2P."
Microsoft added it did not raise the price of Xbox Game Pass once it added games from Bethesda, following the acquisition of parent company ZeniMax Media.
"The integration of Activision and Microsoft will result in a classic elimination of double marginalization effect because Microsoft will be able to acquire these games at (opportunity) cost and will have incentives to distribute them more broadly and increase the output of Game Pass relative to its counterfactual level," said Microsoft. "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. This is especially so given that Game Pass users are price sensitive and an increase in the price of Game Pass would affect all users, including those that do not value or play CoD.
“Game Pass subscribers can cancel at any time after a month of play. 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 churn rates. This is entirely at odds with the Provisional Finding’s assessment of Microsoft’s rationale for the Merger."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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The title is somewhat misleading, Ms does not say their price won't increase after the deals close only that it won't increase as a result of it. Anyway as they are focusing on the service growth more then it's profitability it migth not be to difficult for them to hold any increase for a few years more.
"We're not increasing the price because of the takeover, just because of inflation."
lets see what 2024 brings
MS Says-MS Says-MS Says!!!! Then MS does whatever they want!!!!!
They did not say that. People on the internet transformed what they said into that and now uses it as a fact :) they said they will not increase it for some time and they effectively did not while others did.
I mean this shit goes for everything; they never said Starfield would not be exclusives... And yet again, people (still today) say that they said it...
People takes whatever they says, twist it and then uses that as "facts" :D
Phil Spencer's wording was a little vague, but I see why people thought prices would not be raised.
Spencer said: "I can definitely say we have no plans today to raise the price of our consoles". "We think in a time when our customers are more economically challenged and uncertain than ever, we don't think it's the right move for us at this point to be raising price on our consoles." - this was just over 6 months ago. The timeframe from when he said that and when it finally happened didn't help.
So, of course when they finally did raise it, people remembered those words. It's easy to see why they took flak, especially since it happened in response to Sony's price hike.
Yes but again, this could be true for anything anyone is saying and that's an issue imo. They effectively had no plan at the time to raise.
They did not raise the price for a while and it is pretty hard to argue that it was not a good thing. But in the end; people use this to actually make them look even worse. Just because they actually told them what (we should assume) was true at the time.
I mean you could see how this is really fuck up at the end (and not for Microsoft, or Sony but in general) these days. Anytime someone is being transparent about whatever plan they have (release date, platforms, etc...) it is going to bite them in the ass later when plans actually change (and this is a normal thing).
Anyhow, I think you can plenty of examples where this is true (Microsoft or not) and it just makes conversations difficult at the end.
I have no horse in that particular race. I'm simply saying that they did say they would not raise prices. Nobody likes price hikes and they got the same flak that Sony got as a result.
Let’s just agree to disagree then.
Nothing to really disagree with, but sure. :P
MS tried to pose as good guy on taking hit on Sony raising the price. The customers are still facing the same challenges of when they gave that interview of no intention to raise price but they gone and raised.
They had no plans when they said that and they did not increase it for a good time. That’s exactly what they said… they never said they would never raise it.
And while they did not raise it for a very good reason (being a Good Samaritan is not that and you are probably right that they wanted to ride the ‘good guy’ wave); they actually did what they announced.
If anyone came out of this with the belief that it was forever after they specifically said ‘no plan today’, that’s on them…
If you want to believe =p
And we have seen Sony do the same thing.
But he never said they wouldnt. It was expected especially when everyone else was doing it. Credit to where its due, they held out as long as they can. They also offer an affordable model.
At this point, it’s not something that we have to go over again.
Once they get enough momentum behind the concept and own enough of the companies, they can raise the price as they please. They are playing the long game. Once again, companies are not your friends.
They keep saying that but eventually they will raise it coz they losing too much money!
Didn't MS said recently that gamepass is likely to suffer a price increase (not related to CoD)?
Game Pass prices will not increase as a result of the Merger
AS A RESULT
Title says : Microsoft Says Game Pass Price Won't Increase Following Activision Deal Approval
Because for Phill "good two shoes" Spencer, they may rise the price a week after the deal is approved and say it wasn't because of the deal but because of any other reason.
