Microsoft $69 billion acquisition of Activision Blizzard Inc. has focused attention on the decades-old paradigm of console-exclusive games played on its Xbox and chief rival Sony Group Corp.’s PlayStation, but antitrust officials seeking to block the deal are potentially more concerned about the future of gaming in the cloud.
Cloud gaming is still in its infancy. Most video games, from Activision’s Call of Duty, to Elden Ring, developed by From Software Inc., are purchased individually for about $70 each and downloaded onto a console or computer. But Microsoft, one of the leading cloud computing service providers, is seeking to change that. It has focused its significant gaming efforts on building up a subscription service, Xbox Game Pass, which offers a library of more than 300 titles for about $10 a month for gamers who want to download games to play on the Xbox or PC. A higher tier of the subscription, at $15 a month, includes cloud gaming, which enables subscribers to stream certain games onto any device, even tablets and phones while cloud gaming is still nascent in terms of the technology and content available today, some analysts and executives think it could eventually make consoles less relevant. And Microsoft is in pole position with the infrastructure and content to increase its share. By bringing Activision titles like Candy Crush and Call of Duty under its roof, Microsoft is betting that it will be able to offer more games to its Game Pass subscribers. The FTC’s concern — and Sony’s too — is that Microsoft will take an early lead in the cloud by adding Activision’s games, eventually making them all exclusive to its own platforms. We seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets "Holly Bureau" director of the FTC’s Bureau of Competition, said in a statement accompanying the agency’s complaint.
Game Pass, which launched in 2017, has grown quickly and now has more than 25 million subscribers, far more than a similar offering from Sony, called PlayStation Plus. Microsoft added cloud gaming to Game Pass in 2020 and according to the FTC, more than 20 million gamers have streamed games from the cloud with the service. Microsoft has said that cloud gaming subscription services are essential to reach its goal of expanding to 3 billion gamers worldwide, and its vision of enabling gamers to play games across Windows, Xbox and smartphones.
The cloud lets gamers stream and play graphically rich and technically complicated titles such as Assassin’s Creed Origins and Halo Infinite on less sophisticated devices like smartphones or tablets that otherwise lack the computing power or storage to support the games. The technology has proven tricky and has yet to take off more widely because of the high-quality graphics involved in games and the dependency on ultra-fast data processing necessary to make sure that every press of a button immediately corresponds to a movement in the game, with no lag, known as low-latency
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