Sony CEO’s comments on cloud gaming support Microsoft’s position as Activision Blizzard acquisition faces regulatory hurdles.
TWC – In a surprising turn of events, Sony CEO and president Kenichiro Yoshida’s recent statement regarding the importance of cloud gaming indirectly supports Microsoft’s position amidst the controversy surrounding their proposed acquisition of Activision Blizzard. In an recent interview, Yoshida downplayed the threat posed by the cloud gaming market to consoles, emphasizing the technical challenges involved, such as latency.
Yoshida acknowledged that while the cloud itself is a remarkable business model, it presents significant obstacles when it comes to gaming. He stated, “So there will be challenges to cloud gaming, but we want to take on those challenges.” These comments come at a critical juncture. Microsoft faces regulatory scrutiny in the UK over its proposed $68.7 billion merger with Activision Blizzard, primarily due to concerns regarding competition in the cloud gaming market.
Interestingly, Yoshida’s remarks come from a strategic partnership between Sony and Microsoft signed in 2019. This collaboration aimed to leverage cloud-based gaming and artificial intelligence (AI) solutions. One of the outcomes of this partnership is Gran Turismo Sophy, an AI agent powered by machine learning algorithms capable of challenging even the most skilled players. Yoshida revealed that GT Sophy took advantage of periods of low server activity during cloud gaming to train itself in Gran Turismo 7.
While Yoshida acknowledged the advantages of leveraging idle server hours for AI learning, he also highlighted the inefficiency of maintaining cloud servers continuously active when player activity is concentrated during specific times, primarily in the evenings. This comment reinforces his belief that cloud gaming may gain little traction in the short or medium term.
Sony’s CEO’s stance on cloud gaming could prove advantageous for Microsoft as they contest the UK regulator’s decision to block the Activision Blizzard merger. Sony’s PlayStation division has been a vocal opponent of the deal, primarily focusing on the importance of the Call of Duty franchise in the console market. However, even the Competition and Markets Authority (CMA) cleared the console side of the merger, noting that it would be financially unviable for Microsoft to make the franchise exclusive to Xbox platforms.
The CMA’s opposition centered on concerns about the merger’s potential impact on the nascent cloud gaming market. Most cloud gaming providers, including NVIDIA and Boosteroid, notably support the deal. Microsoft is currently appealing the CMA’s decision, and rumors suggest President Brad Smith will meet with UK Chancellor Jeremy Hunt and CMA officials in the coming week to discuss the merger. With Sony’s CEO’s remarks potentially bolstering Microsoft’s position, the outcome of this ongoing battle remains uncertain.