Microsoft has announced plans to bring PC games built by Activision Blizzard to customers of UK mobile network EE as part of a 10-year cloud gaming commitment. This move follows similar decade-long deals with cloud gaming services Boosteroid, Ubitus, and GeForce Now, and is seen as an effort by Microsoft to address some of the regulatory concerns that continue to hang over its proposed takeover of Activision Blizzard. While the UK’s Competition & Markets Authority has provisionally approved the deal, it continues to have concerns about competition in the cloud market.
Why Cloud Gaming is Pivotal to Microsoft’s Gaming Hybrid Cloud Strategy
Microsoft’s gaming strategy is centered around hybrid cloud platforms that combine cloud services with local hardware to deliver seamless, low-latency gaming experiences to customers. Cloud gaming is an important part of this equation because it allows users to access games without having to download or install them locally, thereby saving disk space and bandwidth. The growing popularity of cloud gaming led Microsoft to launch Xbox Cloud Gaming, which is included in Xbox Game Pass Ultimate memberships, last year. Xbox Cloud Gaming lets members play titles through streaming, enabling them to access games on their phones, tablets or even older devices.
Cloud Gaming Complements, Not Replaces, Existing Gaming Offerings
Contrary to speculations that cloud gaming services will replace gaming discs and downloads, Microsoft has maintained that they will complement these offerings. “Cloud gaming is just one part of the overall Xbox value proposition,” said Kareem Choudhry, Vice President of Cloud Gaming at Microsoft. “It is not being envisioned as an offering that would replace discs and downloads, but instead complement those existing offerings.”
Regulatory Scrutiny over Xbox-Activision Blizzard Deal
The UK’s Competition & Markets Authority has initially approved Microsoft’s proposed acquisition of Activision Blizzard, stating that it will not limit competition in gaming consoles. However, it has also expressed concerns that the deal could affect competition in the cloud gaming market. To allay these concerns, Microsoft has been striking deals with major cloud service providers, including EE, to demonstrate its commitment to a level playing field in the cloud gaming space.
Sony’s Opposition to the Xbox-Activision Blizzard Deal
Sony Interactive Entertainment has also opposed Microsoft’s proposed acquisition of Activision Blizzard, arguing that the move could lead to Microsoft making Call of Duty games exclusive to the Xbox platform. Microsoft has repeatedly denied such claims, but Sony remains unconvinced. Regardless, Sony has also come out publicly to criticize the UK Competition and Markets Authority’s provisional approval of the deal, calling it “a surprising, unprecedented, and irrational decision.”
Microsoft’s Cloud Gaming Strategy: Hybrid Cloud Platforms with Cloud-Native APIs and Edge Computing Capabilities
Microsoft’s gaming strategy is not just limited to cloud gaming, as it involves a hybrid model of cloud services and local hardware. The company believes that this approach will enable it to deliver the best possible gaming experience to users. To achieve this, Microsoft is investing heavily in developing cloud-native application programming interfaces (APIs) that developers can use to integrate cloud services into games. It’s also leveraging edge computing and computing at the network edge to deliver low-latency, high-performance gaming experiences on non-PC devices.
Conclusion: Regulators Remain Cautiously Optimistic about Xbox-Activision Blizzard Deal
As Microsoft moves to complete its proposed acquisition of Activision Blizzard, regulatory authorities continue to scrutinize the deal closely. There are valid concerns about Microsoft’s market dominance, particularly in the cloud gaming space, where it could thwart competition. However, Microsoft’s efforts to strike deals with cloud gaming providers like EE represent a step in the right direction. While it remains to be seen whether this will be enough to convince regulators, it’s clear that Microsoft’s vision for gaming is centered around cloud-native APIs, hybrid cloud platforms, and edge computing capabilities.
