Microsoft believes there is no separate cloud gaming market

Microsoft has shown a significant commitment to cloud gaming services in recent years. Xbox Cloud Gaming allows users to stream their favorite games to different devices while ignoring hardware features.

This focus on cloud services has become one of the main bones of contention in the Activision-Blizzard deal. Regulators like the CMA have argued that after Microsoft owned Activision Blizzard, it could use its position in the cloud gaming market to stifle competition.

However, the attitude of Microsoft is very different. The Company recently responded to the CMA’s preliminary findings and assessments Cloud gaming cannot be viewed as a separate market.

Microsoft Cloud Gaming Market
Source: Microsoft CMA response

The gaming giant sees cloud gaming as a feature and sees it as an alternative rather than a completely different way 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 out titles on consoles before downloading the full version.

Because the information has been truncated, it’s difficult to say what percentage shows this pattern. A similar trend is claimed in the document for PC games.

Microsoft Cloud Gaming Market

But that doesn’t include the mobile gaming segment. Modern smartphones are powerful devices, but they cannot match the gaming capabilities of a full-fledged home console.

This could theoretically give Microsoft an edge, as Xbox cloud services should encourage those without a console to play more games on mobile devices. However, Microsoft believes that advantage may soon fade.

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

This could impact demand for streaming games on mobile 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 was a crucial part of the company’s effort to convince regulators of its intention to keep Call of Duty and Activision games available for multiple platforms post-merger.

Given the widespread concept that cloud gaming is a growing and untapped industry, Microsoft’s stance may come as a surprise to some. The gaming giant may argue against its potential to win over regulators, but only the future will tell if cloud gaming can achieve the appeal many have predicted in the past.

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