In response to the Federal Trade Commission's (FTC) allegations of consumer harm, Microsoft has filed a court document defending its recently announced price increases for its Game Pass service. The price hikes came after the completion of Microsoft's acquisition of Activision Blizzard for $69 billion.

The FTC had raised concerns about Microsoft's new Game Pass tiers, which include a price increase for the Ultimate tier and the introduction of a new Standard tier that does not include day one releases. The regulatory body claimed that these changes were detrimental to consumers and went against its efforts to prevent the acquisition of Activision Blizzard.

In its court filing, Microsoft disputed the FTC's characterization of the Standard Game Pass tier as "degraded." The tech giant stated that the Standard tier was actually replacing the Game Pass for Console offering, which did not include online multiplayer. Microsoft clarified that the discontinued product required an additional purchase of multiplayer functionality, resulting in a higher total cost.

Microsoft also addressed the Game Pass Ultimate price increase, noting that it would provide increased value to subscribers with the inclusion of many new games available on the day of release. Notably, the upcoming release of the highly popular Call of Duty franchise will be available to Game Pass Ultimate subscribers.

Additionally, Microsoft accused the FTC of shifting focus to the subscription market after Microsoft had alleviated concerns of exclusivity for Call of Duty on the Xbox platform. The company stated that it is common for businesses to modify their service offerings over time and questioned the FTC's arguments surrounding vertical foreclosure and potential harm to competition.

The court filing further highlighted the ten-year agreement between Microsoft and Sony to keep Call of Duty on the PlayStation console, further undermining the claim that Microsoft would withhold the game from rivals. Microsoft emphasized that Call of Duty is accessible to anyone who wishes to have it, and there is no evidence of harm to competition, as Sony's subscription service continues to thrive despite offering fewer new games on a day-and-date basis.

Microsoft asserts that the acquisition of Activision Blizzard continues to benefit competition and consumers as the district court had previously recognized. The tech giant remains confident in the legitimacy and positive impact of its Game Pass service.

As the legal battle between Microsoft and the FTC continues, the outcome will have implications for the future of the gaming subscription market and how companies evolve their service offerings over time.