Microsoft calls cloud gaming ‘immature’ in Activision deal filing

After years of touting cloud gaming, Microsoft presented a much less optimistic outlook on the nascent technology this week. The company called cloud gaming “immature” and “unproven” in a dense, tidbit-rich filing as part of its latest effort to push through a $68.7 billion deal to acquire video game maker Activision Blizzard, pending regulatory approval.

“Today cloud gaming remains in its infancy and unproven as a consumer proposition,” Microsoft wrote in a Tuesday response to the U.K. Competition and Markets Authority (CMA), adding that it didn’t expect the situation to improve in the next few years. The company doesn’t foresee cloud gaming will replace consoles or PC, and called it “a new and immature technology.”

The CMA wrote on Sept. 1 that it would launch a full investigation into whether Microsoft buying Activision could hurt market competition in the U.K. The regulator argued that Microsoft could stifle its rivals by removing Call of Duty from PlayStation or by adding Activision’s games to its cloud gaming service. The deal faces scrutiny from multiple international regulators and the United States Federal Trade Commission.

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Microsoft has repeatedly presented cloud gaming as a way to enjoy its games and supplement console sales that trail behind Sony’s. At flagship industry trade show E3 in 2019, one of the industry’s last in-person conferences until events resumed in 2022 — Microsoft showed off its cloud gaming service Project xCloud in eye-catching demos to gamers, saying the service could play all 3,500 games in the Xbox catalogue, and an additional 1,900 games still in development.