Microsoft Believes There Is No Separate Cloud Gaming Market

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Microsoft Not Confident In Cloud Gaming?

Microsoft has shown a significant commitment to cloud gaming services over the last few years. With Xbox Cloud Gaming, users can stream their favorite games to various devices, ignoring hardware capabilities.

This focus on cloud services has become one of the main points of contention about the Activision Blizzard deal. Regulators like the CMA have argued that Microsoft could use its position in the cloud gaming market to handicap competition after owning Activision Blizzard. 

However, Microsoft’s stance is much different. The company recently responded to the CMA’s provisional findings and believes cloud gaming cannot be considered a separate market.

Microsoft Cloud Gaming Market
Source: Microsoft CMA Response

The gaming giant considers cloud gaming a feature, viewing it as an alternative rather than an entirely different means of gaming access.

Microosft also claims that many users prefer to use cloud services as a demo. According to the document, a redacted percentage of Xbox users use cloud gaming to try titles on consoles before downloading the full release.

Since the information has been cut, it is difficult to say how big of a percentage shows this pattern. A similar trend is claimed across PC games in the document. 

Microsoft Cloud Gaming Market

But this does not include the mobile gaming segment. Modern smartphones are capable devices, yet they cannot match the gaming capabilities of a fully-fledged home console. 

This could, in theory, put Microsoft at an advantage since cloud services from Xbox should encourage those without a console to play more games on mobile devices. However, Microsoft believes that this advantage may fade away soon.

The gaming giant believes that increasingly powerful mobile phones have led to more native game releases. Franchises like Call of Duty and Apex Legends are cited as examples of two AAA games that have already been ported to smartphones.

This might impact demand for streaming games on mobiles if the trend continues in the near future.

Microsoft Cloud Gaming Market

Microsoft has also signed a deal with Nvidia to bring games to the GeForce Now cloud service. This has been a crucial part of the company’s effort to convince regulators about the intentions to keep Call of Duty and Activision games available to multiple platforms after the merger.

With the popular concept that cloud gaming is a growing and untapped industry, Microsoft’s stance may come as a surprise to some. The gaming giant may be arguing against its potential to convince regulators, but only the future will tell if cloud gaming can reach the appeal that many have predicted in the past.

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