Microsoft has announced some fairly big changes to how its Xbox Live Gold and Xbox Game Pass subscription services handle auto-renewal in the wake of an investigation by the UK’s Competition & Market Authority (CMA).
The regulator is currently investigating gaming subscriptions services from Sony, Nintendo and Microsoft, and published findings (opens in new tab) that highlight concerns around consumers finding it unclear that their subscriptions will automatically renew, with there being no straightforward process of switching off this function.
The CMA also flagged that some subscribers to services such as PlayStation Plus and Xbox Game Pass may be unaware they are still paying a monthly subscription fee service that they don’t actively use.
Kudos to Microsoft for announcing a string of changes to Xbox Game Pass and Xbox Live Gold in response to these findings. After discussing matters with CMA, Microsoft has committed to making the following changes:
- 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.
CMA’s executive director of enforcement Michael Grenfell said: “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.”
Grenfell also noted: “Other companies offering memberships and subscriptions that auto-renew should take note, and review their practices to ensure they comply with consumer protection law." Neither Sony nor Nintendo has responded to the investigation, but hopefully, they also see the value in making these pro-consumer moves.
As it stands these changes are only set to come to the U.K. But we very much hope Microsoft has plans to roll them out worldwide in the near future.
Analysis: A win for consumers
Many of us have had the frustrating experience of signing up for a new subscription service, forgetting to cancel before the auto-renewal date and then having no choice but to pay a potentially sizeable bill for a service you don’t even use. Any changes that seek to prevent that situation should be applauded.
Granted, the changes Microsoft is making to Xbox Game Pass and Xbox Live Gold aren’t perfect. We would prefer the option of a pro-rata refund to be extended to everyone, not just subscribers with a 12-month subscription, and it would be appreciated if auto-renewal was switched off by default. Nevertheless, these are definitely steps in the right direction.
We’re hoping that Sony and Nintendo will respond to the CMA’s investigation soon and make similar changes to ensure services such as PlayStation Plus and Nintendo Switch Online are more transparent when it comes to auto-renewing.
It’s not just in the gaming world that auto-renewing subscriptions cause problems. The likes of Amazon Prime have been regularly criticized for purposefully making the process of unsubscribing far more difficult than it should be. These practices are designed to mislead consumers, and we're pleased to see Microsoft setting an example that others really should follow.