Microsoft’s Bet on Cloud Gaming Trips Up Its Acquisition Plans
TWC – Microsoft’s $68.7 billion offer to buy Activision Blizzard has hit a roadblock after UK regulators blocked the deal. The acquisition, which would have been one of the biggest in video game history, was aimed at bolstering Microsoft’s Xbox gaming division and adding popular game franchises like Call of Duty and World of Warcraft to its portfolio.
However, the key driver behind the acquisition was cloud gaming – a technology that lets people play games from any device with an internet connection. With cloud gaming, players can stream titles in real-time from a company’s remote data centres, just like watching a movie on Netflix.
Microsoft has invested heavily in cloud gaming and even added it as a free perk within its Xbox Game Pass subscription product. Cloud gaming could be a game-changer for consumers in developing markets where consoles and PCs are too expensive.
But while cloud gaming was the future Microsoft was betting on, it’s also what ultimately threw a spanner in the works for the Activision Blizzard deal. UK regulators were concerned that the acquisition could limit competition in the cloud gaming market.
Microsoft has been playing catch-up to console rivals like Sony, which has sold 32 million units of its PS5 to date. While Microsoft doesn’t publish unit sales figures, estimates put lifetime sales of its Xbox Series X and S consoles just north of 20 million units.
Microsoft CEO Satya Nadella outlined the company’s vision for cloud gaming and its incorporation of Activision Blizzard. With the UK regulator’s decision, Microsoft