After hyping up the future of cloud gaming for so long, Microsoft is now saying it’s not such a big deal – just so it can buy Activision.
While regulators in Brazil and Saudi Arabia have approved Microsoft’s acquisition of Activision Blizzard, the company is facing significant pushback from the UK’s Competition and Markets Authority (CMA).
The CMA is currently conducting a second investigation into the deal, as it has concerns that it could actively harm Microsoft’s competitors, such as Sony. So, Microsoft is doing everything it can to convince the CMA otherwise.
It’s already attempted to underplay the importance of the Call Of Duty franchise (even though it’s paying over £50 billion to own it) and now it’s started to downplay the significance of cloud gaming, which it has a considerable headstart with.
What makes this so disingenuous is that Microsoft has previously been very bullish with cloud streaming technology. Compared to Sony and Nintendo, it’s made more of an effort to promote it and has a dedicated cloud service that lets users stream games to their consoles and mobile phones.
Microsoft is even working on new hardware, currently codenamed Keystone, that will let people access Xbox games without the need for a console, using cloud technology.
The CMA believes that Microsoft already has an advantage over its competitors when it comes to cloud gaming, saying it could ‘leverage this ecosystem together with Activision’s gaming content to strengthen network effects, raise barriers to entry, and hence foreclose rivals in cloud gaming services.’
Microsoft argues that such technology is still ‘new and immature’ and that it doesn’t think it’s going to get that much more popular in the near future.
‘Microsoft and many industry experts expect that gamers on PC and console will continue to download the vast majority of the games they play,’ reads its response.
It adds that the CMA ‘vastly overstates the relevance and importance of cloud gaming services in the gaming space at present and over the medium term.
‘Microsoft agree that in future cloud gaming services may mean that hardware distinctions will become less important. However, the reality is that today cloud gaming remains in its infancy and unproven as a consumer proposition.’
Cloud gaming is admittedly far from commonplace at the moment (as demonstrated by Google’s recent decision to shut down its own Stadia service), but Microsoft is obviously not going to agree with any of the CMA’s concerns, no matter how legitimate they may be.
If it did, it would only encourage the CMA to completely block the acquisition.
In the meantime, the CMA is now open to hearing the general public’s thoughts on the acquisition. It’s provided an email address on gov.uk for anyone to submit their views and evidence either for or against the deal.
This feels like something of a double-edged sword. Allowing the public a say in the matter is a welcome decision, but we imagine many will submit less than nuanced takes on the deal and simply support or condemn Microsoft based on brand loyalty.
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