With Microsoft's ActivisionBlizzard acquisition blocked by the CMA, all eyes should be on cloud gaming.
The United Kingdom’s Competition and Markets Authority delivered a shocker this week when it blocked Microsoft’s acquisition of Activision Blizzard on Wednesday. While a lot of focus on Microsoft’s fight was centered around whether or not the acquisition would give Xbox consoles an unfair advantage over PlayStation consoles, what ultimately decided it was a much smaller market: cloud gaming.
Despite its relatively small impact on the wider company, most of the experts I spoke to agreed that Microsoft has emerged as a cloud gaming leader thanks to its compatibility with a large segment of the Xbox Game Pass Ultimate library. Conversely, Activision Blizzard has had almost no cloud gaming presence outside of one Sekiro: Shadows Die Twice port on Google Stadia before that service’s shutdown.
“Arguable” stands out as the keyword to me here. Like any emergent technology, we’re heavily debating the positives and negatives of cloud gaming, specifically through the lens of this acquisition. But what exactly is it that the CMA sees in Microsoft that worries them? “If you are one of the few early movers in a small market, your market share is naturally going to be high in relative terms,” Severin explains. “Microsoft may naturally feel that it is being punished for innovation which aims to make gaming better and more accessible to consumers . In a way, it is becoming a victim of its own success.”
The debate came down to whether or not a company with an already strong foothold in cloud gaming like Microsoft should also be able to acquire content like that, and in the CMA’s eyes, the answer was no. You may disagree with the answer, but cloud gaming is now at the point where that is definitely a question that needs to be asked when major industry players make big moves.
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