What you need to know
- Microsoft's $68.7 billion purchase of Activision Blizzard King has been slowed to a crawl due to regulatory oversight from the FTC and UK's CMA.
- In opening statements, the FTC has made the argument that cloud streaming and multi-game subscription services can be combined into one market.
- Concerns over cloud streaming were reportedly what led to the CMA in the UK to reject the merger.
- Executives from NVIDIA are expected to testify about cloud gaming.
The FTC and Microsoft have met in the courtroom to battle it out over Microsoft's record setting $68.7 billion purchase of publisher Activision Blizzard King. Each side were given 20 minutes for opening statements before US District Judge Jacqueline Corley in San Francisco. During their opening statements, the FTC's lawyers brought up the cloud gaming market and made the claim that both cloud streaming and multi-game subscription services are the same market.
Microsoft officially launched their cloud streaming service beta in 2021. 2 years later the service remains in beta still and is only available to users with a subscription to Xbox Game Pass Ultimate. Cloud streaming is not unique to Microsoft, however, as we have seen multiple other streaming platforms like Amazon Luna and NVIDIA GeForce Now rise in prominence. There was also the ill-fated Google Stadia, which was recently shuttered. Microsoft's cloud service is unique in that it allows users to gain access to games that they do not expressly own through its connection with Game Pass. This seems to be causing some confusion for the FTC who, in their opening statements, claimed that the Cloud gaming market and multi-game subscription service market are one and the same.
Cloud gaming has proven to be one of the more contentious points for the Xbox x Activision merger, with Microsoft having made multiple 10-year deals to bring Xbox games to smaller cloud streaming platforms such as Boosteroid. These deals have proven to be successful remedies for other regulatory bodies such as in the EU, however the FTC has argued today in court that these remedies should be deemed irrelevant.
During his testimony Head of Microsoft Studios Matt Booty addressed a statement he made in 2019 where he responded "No effing way" when pitched the idea of putting Xbox's exclusive game library on NVIDIA's competing cloud service. Clearly Microsoft's strategy has changed since the comment was originally made, however, as GeForce Now is one of the services that Microsoft has signed a 10-year deal with. NVIDIA's executives are also expected to give testimony during this hearing.
