What is cloud gaming and will the death of the Microsoft Activision Blizzard market affect it?

Xbox’s Cloud Gaming service is at the center of a dispute between Microsoft and some regulators, who believe the tech giant could limit consumer choice. (Xbox)

Earlier this week, the UK’s Competition and Markets Authority (CMA) blocked Microsoft’s proposed takeover of popular gaming developer Activision Blizzard over concerns that the tech giant could “stifle growth” in the cloud gaming market. growing. This follows a similar complaint by the US Federal Trade Commission in December.

Microsoft lost the decision, saying the CMA was sending a “message” that the UK is not open for business.

It seems the only thing regulators, Microsoft and Activision Blizzard can agree on is that cloud gaming is big. So what and why should you care?

What is cloud gaming?

Cloud gaming refers to services that enable users to stream video games over the internet directly to mobile devices, smart TVs and laptops, meaning that people can continue playing games while on the move.

The technology also removes the need for expensive game consoles or high-spec computer rigs, because the video games work regardless of the device, as long as you have a good enough internet connection.

How common is it?

Microsoft already has around 60-70% of the cloud gaming market, according to the CMA.  (Microsoft)

Microsoft already has around 60-70% of the cloud gaming market, according to the CMA. (Microsoft)

At the moment, the main cloud gaming services available are Microsoft’s Xbox Cloud Gaming (£10.99 per month), Nvidia’s GeForce Now (free but games must be purchased separately) , Sony’s Playstation Plus (from £49.99 per year) and Amazon’s Luna (£8.99 per month). All these services have only existed since the pandemic.

According to research firm S&P Global, the global cloud gaming market is expected to grow from $2.73bn (£2.15bn) in 2022 to more than $13bn by 2026, but today, it’s hard to say exactly how much a person who uses cloud gaming services.

What we do know is that Microsoft claims to have 20 million users on its Xbox Cloud Gaming service as of November 2022, which is bundled with its monthly subscription service Xbox Game Pass Ultimate.

But the other cloud gaming service providers still have no user figures, and Google shut down its Google Stadia cloud gaming service in January, just three years after its launch in November 2019.

The CMA gives us a hint – in its ruling on the Microsoft-Activision Blizzard deal, the watchdog said that Microsoft already “accounts for an estimated 60-70% of global cloud gaming services”.

Advantages of cloud gaming

The advantage of cloud gaming is that it enables many more people to enjoy gaming instantly, such as casual users, who only have low specification laptops, or consumers who cannot afford it of them to upgrade the gaming consoles or the graphics of the next generation. cards for their personal computers to run the video games.

All you need is a working internet connection and you can sign into your account from a web browser on a computer or open the app on your mobile phone or tablet.

Many video games are also very expensive – Star Wars Jedi: Survivor for example, which is out today, comes with a hefty price tag of £60, so a monthly subscription can seem more affordable, although it is not known when the game available for streaming on Xbox or any other service.

The technology enables users to have a Netflix-style cross-platform experience and play their favorite video games on the go and then pick them up right where they left them at home on their computer or game console – basically what you have when you play games like Fortnite, Minecraft, Genshin Impact, Call of Duty, Among Us and Apex Legends.

The disadvantages of cloud gaming

Browse Google and you’ll see that one of the most commonly searched phrases is, “Why is cloud gaming so laggy?”

One of the biggest criticisms of cloud gaming is that games lag, freeze or crash at critical moments, or the resolution seems very low because the graphics have to be compressed to be streamed to your device.

Gamers vary in their opinions of the different cloud gaming providers – some say that the Xbox Cloud Gaming service has no lag, so they are able to execute movements and react in split seconds to enemies on the screen, while others, like with the Standardand Barry Collins found the experience of the game to be tedious and frustrating, with repeated stutters and screen redraws.

On the other hand, reception to Nvidia’s new GeForce Now service is very complementary – critics say that high-spectrum video games run instantly on low-end laptops and provide very high frame rates, as well as fast response times.

GeForce Now (Nvidia)

GeForce Now (Nvidia)

However, the reality is that the internet infrastructure we have today is still not powerful enough overall to support a truly amazing cloud gaming experience.

Much of the tech industry’s hopes for graphics-intensive cross-platform gaming experiences have been pinned on the rise and spread of 5G, which is meant to make our mobile internet experiences instant, reliable and far more powerful than as they are today.

Sadly, we’re not at that point yet, Nick Maynard, head of UK-based Juniper Research, tells the Standard.

“Different gamers, such as mobile gamers or those who don’t have the latest hardware, will be able to access high-end games, creating a more open gaming environment,” he says.

Maynard said: “However, we will need to see further rollout of 5G and superfast broadband to enable a reasonable level of service.”

S&P Global agrees. Research analyst Neil Barbour estimates that if you took a “frequent gamer” – someone who plays video games about 42 hours a month – and spent most of their time streaming games from the cloud, by 2026 there would be they used. six times more data than they do today and there are serious concerns that our current broadband service providers would not be able to handle this level of web traffic.

Will the CMA’s decision significantly affect the future of cloud gaming?

Microsoft's proposed 68.7 billion dollar (& 59.4 billion) takeover of games publisher Activision Blizzard could raise competition concerns and warrant a deeper investigation, the UK's competition watchdog said (Koshiro K).  /Alamy/PA)

Microsoft’s proposed 68.7 billion dollar (£59.4 billion) takeover of games publisher Activision Blizzard could raise competition concerns and warrant a deeper investigation, the UK’s competition watchdog said (Koshiro K/Alamy /PA)

Again, opinion is divided on this one.

While Microsoft says it plans to make Activision Blizzard’s massive catalog of games available on 150 million more devices than ever before and has promised not to block other service providers from providing popular titles like Call of Duty for 10 years on its at least, the story is still Microsoft. controls the largest market share.

That means we could end a situation where users feel forced to pick Xbox over other providers because of a lack of choice. And as we’ve learned with content streaming services, most people can’t afford to subscribe to them all.

“However, it could have a big impact on the market – consolidation has been a consistent trend within gaming for some time, so action to slow this down could have a huge impact,” he says. Barbour.

“Cloud services need to have the best titles – gaming is very much name driven, with big releases like Call of Duty and FIFA being big news driving the market forward … and that’s why the Activision / Microsoft deal was blocked (like Microsoft acquiring Call of Duty).

“Just because people can play the latest console game on a phone doesn’t mean it’s the best experience, in terms of screen size, control interface etc. However, we will see more content become available to a wider, larger audience. option, and subscription services are even more popular.”

But tech journalists aren’t so sure. Sean Hollister, senior editor at The Verge, thinks that “cloud gaming is still kind of a thing” – an opinion I think I share.

After all, growth in the global cloud market is slowing, US-based research firm Synergy reported in February, which means if you want to grow your cloud business, you need to get a lot more people to join the They use the cloud for a new purpose. re not to use it already for now.

Hollister says none of the other tech giants doing cloud gaming are doing great, either.

He explained: “Microsoft is being punished because Google Stadia completely failed, because Amazon Luna didn’t go any faster, because Sony went astray, because Nvidia can’t stream your own purchased games to you without taking negotiate with every publisher and developer under the sun.

“With very little competition, Microsoft’s xCloud looks dominant, especially when you consider that Microsoft bumps it into every Xbox Game Pass Ultimate subscription – whose subscribers, as we know, can try xCloud over and over again .

“Microsoft is a big fish in a tiny pond. And paradoxically, the UK decision could help keep it that way.”

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