The UK’s Competition and Markets Authority (shortened to CMA) recently demanded a response from Microsoft to its investigation, and the Redmond company has done the obligatory rounds.

The CMA did not approve the nearly $70 billion deal Microsoft offered Activision Blizzard yet. While the CMA also wants to hear the public’s opinion, the US tech company has provided a rather lengthy response to the UK authority::

“Cloud gaming is a new and immature technology which the CMA has recognized faces significant challenges, particularly on mobile devices. While this may grow, particularly on mobile devices, adoption is not expected to be rapid as it requires a substantial change in consumer behaviour. Research published by the CMA shows that both worldwide and in the UK, where cloud gaming app users had a choice between a provider’s native or web app on Android, around 99% of users used the native app, with 1% using either the web app or a combination of the web and native app. Microsoft and many industry experts expect gamers on PC and consoles to continue to download the vast majority of the games they play.

[…] The Referral Decision rejects Microsoft’s views because they “fail to recognize the impact of cloud gaming services on demand for consoles, PCs, and games”, arguing that “cloud gaming services can be seen as an alternative for gamers to owning a console or PC”. This vastly overstates the current relevance and importance of cloud gaming services in the gaming space and over the medium term. Microsoft agrees that future cloud gaming services may make hardware distinctions less critical.

However, the reality is that today cloud gaming remains in its infancy and unproven as a consumer proposition. Evidence from Microsoft’s internal documents, data and third-party reports shows that cloud gaming services are not relevant in any meaningful way to gamers’ “demand for consoles, PCs, and games”, nor is this expected to change in the next few years. No evidence is presented in the Decision to suggest otherwise,” Microsoft wrote.

At the end of 2019, the Xbox Cloud Gaming (Project xCloud then) team admitted that latency (lag) made it better to play locally, but not much has changed since then, and the uptake of 5G mobile technology hasn’t been strong enough. However, Microsoft CEO Satya Nadella has set a target of three billion users, and PCs and consoles will not be enough to achieve it. According to a recent report by Newzoo, the cloud gaming market revenue will reach $2.4 billion this year, and with a projected 51% annual growth rate, it will reach $8.2 billion by 2025.

Still, Microsoft and the CMA will have some back-and-forth…

Source: WCCFTech, Gamesindustry