Microsoft Calls Cloud Gaming 'Unproven' in Legal Filing

Despite positioning cloud gaming as the bright future of video games, Microsoft has referred to the technology as "immature" and "unproven" in a recent filing tied to its pending acquisition of Activision Blizzard, the Washington Post reported Wednesday.

"Today cloud gaming remains in its infancy and unproven as a consumer proposition," Microsoft wrote Tuesday in a response to the U.K. Competition and Markets Authority. The company also said it doesn't expect things to improve in the next few years, and that cloud gaming won't replace consoles or PC in part because it is "a new and immature technology."

Microsoft's response comes after the CMA determined Sept. 1 that it would launch a full investigation into the potential for competition stifling as a result of the acquisition. The regulator flagged that Microsoft could make Call of Duty exclusive to its platforms and add Activision games to its cloud gaming service.

Microsoft has invested heavily in cloud gaming, showing off its ambitious Project xCloud service at E3 2019 and boasting the service would play all 3,500 games in the Xbox catalog in addition to 1,900 games still in development.

Cloud gaming's standing in the industry suffered a major blow when Google announced Sept. 29 that it would shut down its cloud gaming service, Stadia, by January 2023. Microsoft's admission that the service is not as imminently ascendant as it otherwise asserts shows further cracks in the cloud gaming boosterism.

Several other noteworthy tidbits appeared in the filing, including that Xbox has agreed not to bring Call of Duty to Game Pass "for a number of years" to honor a pre-existing deal between Activision Blizzard and Sony to give PlayStation users early access to the games until 2024. Microsoft also revealed it had offered to keep Call of Duty on PlayStation through 2027, but Sony rejected the proposition.

The filings further revealed details of Microsoft's coming mobile game store, showing it would adapt the pre-existing Xbox Store into a mobile form.

Finally, the filing revealed unusually candid details about Microsoft's market performance. It says Sony and Nintendo have outsold Microsoft in terms of console units, and that both sport higher numbers of monthly active users. (No numbers were mentioned.) Sony has also blocked Xbox Game Pass from working on PlayStation.

These admissions are pitched to make Microsoft appear weaker than it usually prefers to appear as the company attempts to convince U.K. regulators they needn't fear stifled competition as a result of its $68.7 billion acquisition of Activision Blizzard. Although Brazilian regulators have already approved the deal, it remains to be seen if American and British regulators will follow suit.