We have reached an inflection point in Microsoft’s efforts to acquire Call of Duty and World of Warcraft publisher Activision Blizzard as the FTC’s lawsuit to stop it went before a judge. Representatives from Microsoft, Sony, Nintendo, Google, and Nvidia chimed in during the hearing, as did a variety of analysts presenting data to help determine whether or not this acquisition will hurt competition in the console and cloud gaming markets.
As the video game industry is quite buttoned-up and secretive, this trial has given us an unprecedented look behind the curtain at Xbox, PlayStation, and Activision’s motivations, past claims and mistakes they made, and more. In a case filled with revelations, these five details were a particularly illuminating look into the video game industry's inner workings.
Microsoft revealed its real cloud gaming motivation
Since 2019, Microsoft has been one of the video game industry’s biggest purveyors of cloud gaming alongside the likes of Nvidia, Amazon, and Google. It previously claimed that its primary goal with this was to get its hardcore games like Halo in front of as many people as possible, but this trial has revealed a secondary motivation. Microsoft hoped cloud gaming would give them an edge in the mobile gaming market, where Xbox has struggled to establish itself.
“We built xCloud knowing that on Xbox we have many games that run on our console,” Head of Xbox Phil Spencer explained. “There are many users around the world that have phones that aren’t able to play those games, nor will they be. Our strategy was to put consoles in our data centers to stream those consoles to a mobile phone, so if someone wanted to play Halo on a mobile phone, they would have access to those games through streaming.
It didn’t work out that way, though. Xbox’s VP of Game Creator Experience, Sarah Bond, testified that the most common use for cloud gaming is not mobile play but console players trying out a game before or during a download. Because cloud gaming is a sticking point for the CMA, Microsoft wants to downplay its relevancy to Xbox’s business, but, as I wrote in April, it might be too late for them to do that. Even if cloud gaming’s future is as a supplementary service on consoles, it’s sticking around as one of the central aspects of dissent against the acquisition. The future of cloud gaming is just playing out in a way no one predicted when it re-rose to prominence four years ago.
Activision regrets not putting Call of Duty on Nintendo Switch
