Microsoft calls cloud gaming ‘immature’ in Activision deal filing

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After years of hyping cloud gaming, Microsoft this week presented a much less rosy outlook on the nascent technology. The company called cloud gaming “immature” and “unproven” in a dense, detail-rich presentation as part of its latest effort to push through a pending $68.7 billion deal to acquire video game maker Activision Blizzard. regulatory approval.

“Today, cloud gaming is still in its infancy and untested as a consumer proposition,” Microsoft wrote in a response to the UK Competition and Markets Authority (CMA) on Tuesday, adding that it did not he hoped that the situation would improve in the coming years. The company doesn’t envision cloud gaming replacing consoles or PCs, calling it “a new and immature technology.”

The CMA wrote on September 1 that it would launch a full investigation into whether Microsoft’s purchase of Activision could harm competition in the UK market. The regulator argued that Microsoft could stifle rivals by removing Call of Duty from PlayStation or adding Activision’s games to its cloud. gaming service The deal faces scrutiny from multiple international regulators and the US Federal Trade Commission.

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Microsoft has repeatedly pitched cloud gaming as a way to enjoy its games and supplement console sales that lag behind Sony’s. At the industry’s flagship E3 trade show in 2019, one of the industry’s last in-person conferences until events resumed in 2022, Microsoft showed off its Project xCloud cloud gaming service in eye-catching demos for gamers, saying that the service could play all 3,500 games in the Xbox catalog and another 1,900 games still in development.

“We can’t wait to see how this space continues to grow and look forward to supporting development studios, our partners and others in the industry who are investing in cloud gaming as it invites more people to experience gaming,” said Vice President from Xbox Cloud Gaming. Catherine Gluckstein in an Oct. 6 statement to The Washington Post.

Gluckstein’s comments came in response to questions about the state of gaming after the closure of a competing cloud platform, Google’s Stadia. Google announced on September 29 that Stadia would shut down in January 2023.

Microsoft’s message in its response to the CMA on Tuesday was more tempered, arguing that it’s likely to take a long time for customers to switch to cloud gaming, and they’re likely to stick with PC and console for the most part. of the games. Despite the hype around cloud gaming, Microsoft wrote that gamers don’t care if their games are stored locally or in the cloud. Instead, the technology needs to win them over in-game content and actual tech specs like graphics and latency.

Even though the cloud gaming landscape has tightened with the shutdown of Stadia, brands like Logitech, Ubisoft, and Razer continue to optimistically promote their cloud gaming services.

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Microsoft’s presentation also contained a variety of other facts, some more recent than others, offering a rare glimpse into the notoriously secretive games industry.

Xbox has agreed not to bring Call of Duty to Game Pass “for several years” to honor Activision Blizzard’s ongoing deal with Sony that provides early access to PlayStation users, which ends in 2024. Microsoft revealed in the filing that it had offered to keep Call of Duty on PlayStation until 2027, but Sony ultimately rejected this offer. Microsoft’s response to concerns about Call of Duty has been to continue to insist that it will not remove the lucrative franchise from PlayStation, as Microsoft has repeatedly told gamers and regulators that it would lose money on the franchise if Call of Duty leaves the PlayStation platform. Sony.

Microsoft also detailed in the filing its plans to build a mobile game store across devices, which the company first announced in February. The mobile store would adapt the pre-existing Xbox Store that consumers already know from PCs and consoles into a more portable platform to challenge the Google Play Store and Apple’s App Store.

Microsoft’s presentation is significantly more candid about the console wars than some of its blog posts and executive statements over the years. It fully admits to the UK regulator that Sony and Nintendo have overtaken the company in the number of consoles sold and the number of monthly active users. Microsoft’s presentation even contained criticism of Call of Duty, noting how reviewers criticized the 2021 installment “Call of Duty: Vanguard” at launch, and that the franchise could flop over time.

In its attempt to convince the UK regulator that the acquisition would not hurt competition, Microsoft exposed several of its shortcomings in the filing. The company has never matched Sony’s lead in game exclusives and console sales. He also said that Sony has Xbox Game Pass locked on PlayStation. Altogether, the filing shows Microsoft alleging that it is more David than Goliath when it comes to gaming as it tries to gain regulatory approval.

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