The potential for future cloud gaming
Microsoft’s struggle to buy video game giant Activision Blizzard continues. The proposed deal is described as the largest merger in consumer technology in decades and shows the estimated potential for cloud gaming. The UK’s competition authority CMA has now objected to Microsoft’s proposed purchase of Activision over concerns the deal would alter the future of the fast-growing cloud gaming market.
CMA says Microsoft’s solution had significant shortcomings and would require regulatory oversight by CMA.
Microsoft president Brad Smith in an interview with the BB said he is “very disappointed” with the CMA’s decision, “but more than that, unfortunately, I think it’s bad for Britain”.
“It does more than shake our confidence in the future of the opportunity to grow a technology business in Britain than we’ve ever confronted before,” he said.
“There’s a clear message here – the European Union is a more attractive place to start a business than the United Kingdom”, Smith said.
“The UK cloud gaming market is growing fast. Monthly active users in the UK more than tripled from the start of 2021 to the end of 2022. It is forecast to be worth up to £11 billion globally and £1 billion in the UK by 2026. By way of comparison, sales of recorded music in the UK in 2021 amounted to £1.1billion”, CMA says.
Perforce Software in a trend and forecast for gaming says “cloud streaming will become the leading platform by 2025, and as teams continue to move toward hybrid/remote work environments, the ability to easily share and reuse assets will be critical to their collaboration efforts.”
Gaming is a fast growing market and the growth is forecasted to continue, especially in the future metaverse. The US competition authority, Federal Trade Commission, recently took the controversial decision to go to court to block Microsoft’s buying Activision Blizzard for USD 69 billion – the company’s biggest acquisition ever.
FTC thinks Microsoft could harm competition by making Activision games, like globally super popular “Call of Duty”, available only on Microsoft’s Xbox console. Microsoft’s answer is that the deal would expand competition.
Despite discussions focusing on controlling and regulating the power of big tech companies, the FTC decision to take Microsoft/Activision Blizzard deal to court has not only been met with applause.
Critics have said the FTC’s position looks politically motivated. FTC’ chair, Lina Khan, appointed in 2021 by president Joe Biden, in an interview with Vox earlier said that when companies don’t face robust competition, or when they’re allowed to just squash out competition, they can become too big to care.
They can impose all sorts of terms or contractual provisions that really just leave Americans in a position of take it or leave it. And in as much as these products and services, these digital tools, are becoming essential to navigating day-to-day life, we want to make sure that people have choices. They’re not just stuck in place with a company that can do whatever it wants, she told Vox.
Microsoft’s president, Brad Smith, has said “we have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. While we believe in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present it in court.”
“We continue to believe that our deal to acquire Activision Blizzard will expand competition and create more opportunities for gamers and game developers.”
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