A lot has changed in the cloud gaming space over the past few months, including the shutdown of Google Stadia. This has led Microsoft to call cloud gaming a “new and immature technology” in a recent filing, refuting the UK’s Competition and Markets Authority (CMA), even though Microsoft appears to be all-encompassing cloud gaming and has launched a new project at Activision Blizzard. Buy.
In early October, we reported on the CMA’s Phase 1 investigation into the merger of Microsoft and Activision Blizzard. The survey raised concerns that Microsoft will turn popular games like Call of Duty into Xbox exclusives. Beyond that, though, there are concerns that the acquisition will help Microsoft stifle competition in the cloud gaming market.
The latter point was brought up again in the second phase of the investigation and filing, where Microsoft dismissed the CMA’s “theory” that Microsoft has an edge over its cloud rivals and will get a boost from the deal. In response to an overview, the CMA believes Microsoft’s “multi-product ecosystem” of “leading cloud platforms and PC operating systems” could lead to some competition issues in the market. However, Microsoft explained that Xbox Cloud Gaming doesn’t use Azure technology or stream games from PC hardware, which could even be a disadvantage.
Additionally, Microsoft claims that “consumer adoption of cloud gaming remains low” and that stiff competition with other cloud competitors will hinder adoption of the technology. The company also claims that cloud gaming is a “new, immature technology” where consumers choose to download their games and play them locally. That last point, however, seems a little hypocritical, as companies like Google’s Stadia have had their ups and downs in the short span of time cloud gaming has been around. Also, companies like Netflix are looking to get into the game, and NVIDIA seems to be staying strong with GeForce Now. We’ve also seen rumors of extending Microsoft’s cloud accessibility via a dongle codenamed “Keystone,” but it remains to be seen what happens there.
Maybe “new and immature” isn’t the right word, but given that technology is solid, not business models, “robust but thriving” would be more accurate for what we’ve seen so far. Regardless, Microsoft’s initial response to the CMA’s Phase 2 investigation is rather interesting and worth reading if you get the chance. It certainly offers some unique insights into how Microsoft sees the cloud gaming space, so let us know what you think about it in the comments below.