Microsoft has announced that it has entered into a decade-long cloud gaming partnership with UK-based platform Nware. The deal comes after the Competition & Markets Authority (CMA) moved to block Microsoft’s bid to acquire Activision Blizzard for $68.7bn. While the CMA raised significant concerns about Microsoft’s power in the cloud gaming market, the new partnership is designed to help bring more games to more people through the cloud.
Cloud Gaming Under Scrutiny
The CMA’s decision to block Microsoft’s purchase of Activision Blizzard comes as regulators become increasingly concerned about the dominance of big tech firms such as Microsoft. The regulator argued that the deal would give Microsoft too much power over the cloud gaming market in the UK. The company previously signed agreements with a number of streaming providers, hoping that the deals would persuade regulators to approve the acquisition, but this strategy failed to pay off.
Activision Blizzard CEO Says Cloud Gaming Not a Big Market
The CEO of Activision Blizzard, Bobby Kotick, responded to the CMA’s decision by saying that cloud gaming is an “inconsequential” market. However, Microsoft president Brad Smith believes that the CMA’s decision was based on a faulty premise regarding the popularity of the cloud gaming market. The CMA itself admitted that the cloud gaming segment of the wider video game industry remains in its “infancy.”
Microsoft Enters New Partnership with Nware
Despite the setback with the Activision Blizzard deal, Microsoft has continued to look for ways to increase its presence in the cloud gaming market. The company recently signed a 10-year deal with European cloud gaming platform Nware to stream PC games made by Xbox and Activision Blizzard to its platform, should the deal eventually close. Nware is a company that lets users stream games they own on Steam, Epic Games Store, or Ubisoft Connect via the cloud. It also gives members access to games like Minecraft and Roblox for a subscription fee that starts at $11 per month. In a statement, Nware expressed its excitement about working with Microsoft on this partnership for cloud gaming in Europe.
Appeal to the CMA Decision
Microsoft and Activision Blizzard are working together to appeal the CMA’s decision. However, it remains to be seen how long this process might take or whether it will ultimately be successful. The European Union is expected to announce its decision on the matter by May 22nd, and there are reports suggesting that the EU will approve the deal. In the meantime, Microsoft will continue to expand its cloud gaming operations and look for new partnerships that will help it consolidate its position in the market.
