Microsoft Is Restructuring Its Xbox Subscriptions With U.K. Legislation For New Flexible Return Policy

While video games continue to dominate the globe in terms of gross revenue across multiple markets and trumping other industries like film & music, respected legislation tends to get involved when believing platform holders or publishers are negatively impacting the market. You might remember previously where then-running Senator Josh Hawley (R-MO) suggested a ban on lootboxes previously.

While other regions like Belgium outright banned the business model, most of the industry answered to the use of these commerce tactics effectively. Even more is companies like Microsoft, Sony, and Nintendo now expect developers to list if these elements are in its games. Additionally, the Entertainment Software Rating Board (ESRB) also required teams to be transparent on additional purchases for new games when being rated.

Similarly, subscription services from video game conglomerates are also in the same category which legislation believes could be improved upon for auto-renewal services. Regulators in the U.K. shared that the Competition and Markets Authority (CMA) is working with Microsoft to smoothen the experience for re-upping a subscription or asking for a refund.

Gamers need to be given clear and timely information to make informed choices when signing up for auto-renewing memberships and subscriptions. We are therefore pleased that Microsoft has given the CMA these formal undertakings to improve the fairness of their practices and protect consumers, and will be offering refunds to certain customers.

Michael Grenfell, U.K. Competition and Markets Authority Executive Director of Enforcement

Adding, “Other companies offering memberships and subscriptions that auto-renew should take note, and review their practices to ensure they comply with consumer protection law.” Currently, the Xbox firm is the only platform holder to enter the process with the U.K. CMA as both Nintendo nor Sony Interactive Entertainment has approached the matters.

Ultimately, the new initiative will deliver greater transparency between Microsoft to the consumer. You can read the full list of bullet points below:

Better upfront information: Microsoft will provide more transparent, upfront information to help customers understand their Xbox membership – making clear, for example, that the subscription will auto-renew unless the customer turns off auto-renewal; when the subscription will auto-renew; how much it will cost; and how the customer can receive a refund after an accidental renewal.
Refunds: Microsoft will contact existing customers on recurring 12-month contracts and give them the option to end their contract and claim a pro-rata refund.
Inactive memberships: Microsoft will also contact existing customers who haven’t used their memberships for a long time but are still paying. These customers will be reminded how to stop payments, and if they continue not to use their memberships, Microsoft will ultimately stop taking further payments.
Better information about price increases: Microsoft will give clearer notifications of any future price rises, and will ensure people know how to turn off auto-renewal if they don’t want to pay the higher price.

“The changes relate to Microsoft’s practices in relation to the automatic renewal of contracts for online gaming services. Microsoft’s Xbox Live Gold and Game Pass products allow people to access a library of games and play together online. They are offered as memberships which are often entered into on an auto-renewal basis. This means that membership is automatically rolled over at the end of each contract period and the customer charged unless they actively take steps to stop the subscription.

“As part of an investigation into the online console video gaming sector the Competition and Markets Authority (CMA) identified concerns about certain features of Microsoft’s auto-renewing subscriptions, in particular: whether it was clear upfront that contracts would automatically renew; how easy it was to turn off automatic renewal; and whether people may not have realised they were still paying for services they no longer used.”

Recently, Sony Interactive Entertainment did make surprising changes to its platform in the U.K. While not directly involving law makers, the firm decided to pull its PlayStation Now subscription cards from retailers to full emphasize on PlayStation prepaid cards instead. You can read the full report by heading here.

What are your thoughts on Microsoft’s endeavor to better consumer transparency?

Source: U.K. Competition and Markets Authority