Microsoft Admits Cloud Gaming Is Sloppy For Now

Microsoft
(Image credit: Microsoft)

Cloud game streaming services have been quite a popular topic in the game industry in the past 15 – 20 years, as the perspective of playing a high-end game on a mediocre device with a good Internet connection sounds very alluring. But after numerous major game companies have invested hundreds of millions in their cloud gaming platforms, Microsoft says that the technology is still in its infancy and its prime time is nowhere close.

At least, this is what the software giant wrote in response to the U.K.'s Competition and Market Authority this week. Among the significant concerns CMA has regarding Microsoft's proposed acquisition of Activision Blizzard are withholding popular games like Call of Duty from competing platforms (namely Sony's PlayStation) and subsequent monopolization of the emerging market of cloud game streaming services. As a result, CMA launched an in-depth investigation of the proposed transaction earlier this month to learn more about the matter.

"This is a new and immature technology which the CMA has recognized faces significant challenges, particularly on mobile devices," Microsoft wrote in its 33-page response (opens in new tab) to CMA's concerns (via PC Gamer (opens in new tab)). "Microsoft agree that in future cloud gaming services may mean that hardware distinctions will become less important. However, the reality is that today cloud gaming remains in its infancy and unproven as a consumer proposition."

Back in the 2000s and for the better part of the 2010s, cloud game streaming services suffered from major technology limitations, starting from the imperfection of data centers and servers on the cloud side and a slow Internet connection on the client side. By now, many technological limitations have been largely overcome. Yet, local rendering still provides the best and most consistent visual quality and the lowest input lag, which is particularly important for avid gamers and something most gamers know.

Since Microsoft, Sony, and Nvidia continue to invest hefty sums of money in improving their cloud gaming services and providing an experience that is on par with that offered by local PCs or consoles, cloud gaming services are still not quite there. Meanwhile, they can enable playing PC or console games using smartphones, a type of experience that has not been available before and which is something that numerous companies are putting their money on (e.g., Qualcomm, Razer, and Verizon). But to compete against traditional games, streaming services will need to offer visual quality, latencies, and loading times comparable to those of downloadable titles.

"While this may grow, particularly on mobile devices, adoption is not expected to be rapid as it requires a significant change in consumer behaviour," Microsoft explained. "Gamers care about subject matter, storylines, graphical performance, speed (e.g., loading times and latencies), mechanics, game selection, and game cost. […] Streaming services therefore need to compete effectively with downloadable gaming options across these metrics if they are to grow."

Because cloud game streaming services are not popular among consumers, Microsoft says that it is not in its interest to harm competing for game streaming services or withhold popular Activision Blizzard games from rivals as it is interested in promoting cloud gaming in general.

"Consumer adoption of cloud gaming remains low," Microsoft said. "Harming or degrading rival services would significantly set-back adoption of this technology – protecting market-leading incumbents (i.e., Sony on console, Apple and Google on mobile, as well as Steam on PC). […] Instead, [Microsoft Xbox's] incentive is to encourage the widespread adoption of cloud gaming technologies by as many providers as possible to encourage the major shift in consumer behaviour required for cloud gaming to succeed."

Cloud gaming has the potential to bring games to devices incapable of rendering high-end titles locally, which will expand the global gaming market. Many technologies required for competitive cloud gaming platforms are already here, so the question is when cloud gaming will become a mainstream phenomenon. Yet, keep in mind that right now, Microsoft needs to convince the CMA and other regulators of two things: that they should not be concerned about cloud gaming today as it is an immature technology, but that the proposed takeover of Activision Blizzard will enable Microsoft to increase adoption of the technology.

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • PlaneInTheSky
    At least, this is what the software giant wrote in response to the U.K.'s Competition and Market Authority this week.

    So the only reason MS said that cloud gaming is in its infancy is because they did it to appease UK regulators for their Activision/Blizzard takeover.

    The goal of Microsoft is to make it seems like they're just another company, and not the giant US behemoth controlling the whole tech sector in Europe together with Google and Amazon.
    Reply
  • thestryker
    PlaneInTheSky said:
    So the only reason MS said that cloud gaming is in its infancy is because they did it to appease UK regulators for their Activision/Blizzard takeover.

    The goal of Microsoft is to make it seems like they're just another company, and not the giant US behemoth controlling the whole tech sector in Europe together with Google and Amazon.
    To be fair it is in its infancy and the only standalone attempt (Stadia) failed miserably and the ones still around are effectively value added services.

    Microsoft is hardly an innocent, but the CMA has it bad for CoD and nothing else (given the size of the ABK portfolio how could other things not come up) which makes them very hard to take seriously as a regulatory anything.
    Reply
  • hotaru251
    PlaneInTheSky said:
    So the only reason MS said that cloud gaming is in its infancy is because they did it to appease UK regulators for their Activision/Blizzard takeover.
    except its true.

    until we have better mapped networks (i.e. faster speeds and fewer stops & possibly dedicated lanes) cloud gaming isnt gonna work.

    only place in world it "could" work atm is S. Korea as they have extremely fast net and its a small palce so if host was in S.Korea itself would be fine i believe.

    but on a nation like NA/Europe/etc thats multitudes larger?
    good luck even in next 20 yrs given ISP's refuse to spread faster mroe reliable coverage & hosts would need to have servers set up a lot more palces (so ur not hoppign as far away)

    PlaneInTheSky said:
    The goal of Microsoft is to make it seems like they're just another company, and not the giant US behemoth controlling the whole tech sector in Europe together with Google and Amazon.
    except they don't even IF they get approved.

    AVB is large, but its by far nowhere near a monopoly.

    Sony, Nintendo, etc all contend for market.

    Sony's entire "buy a PS" is due to exclusives...they've done it for ages now.

    The only reason they want to stop MS is due to the "chance" (its low) they'd ditch PS for future cod as its basically their biggest thing.

    MS does very few "exclusives".

    it releases most games on PC/XB/Nintendo/mobile/PS.

    The "real" reason Sony is agaisnt it is Gamepass.

    For the consumer Gamepass is unbeatable.
    for devs? Gamepass is beneficial in spreading userbase & can utilize MS's servers (which can be hit or miss mind you)
    playing games on console/pc & streaming to your new smart tv's w/o needing console is how it SHOULD be.

    For sony? thats a threat.
    They tried their PS+ pass or w/e they called it and it just lacks offerings (and requires console still) vs how much u get via gamepass.

    Sony has very few titles to justify the cost of console.


    MS will say beneficial stuff ofc (its business)
    Sony will say negatives ofc (again..business)

    Devs honestly benefit more siding with MS (as MS can help their games reach wider audience & thus mroe $ for the devs)

    but in NO way does MS getting AVB "monopolize" cloud gaming as its decades from being viable for anythign requiring low latency & stable connection.

    nor do they control whole tech sector.

    as an OS? Linux & iOS (and linux is more used in business on high end (servers and stuff)
    as a console maker? Nintendo, Sony, Valve, the mobile market...so plenty of competition.
    game devs? yes, AVB and MS have a lot of ip's but by far not a majority.
    They basically gave up on VR/AR (and even if stayed still bunch of players there)
    ....data collecting? as bad as it is...they are by FAR not the only nor the largest.


    MS gettign AVB isnt bad like Nvidia wanting ARM (as that basically would of effected the ENTIRE ARM reliant field which is massive).
    Reply
  • InvalidError
    Cloud-hosted games may work for "tourist mode" exploration games where response time is of little or no importance. For faster-paced content where the extra 20-30ms of round-trip time over the internet, through the hosting farm, through video encoders, back through the internet, through video decoders and finally out to screen accounts for a disproportionate amount of the 30-50ms input-to-screen local latency, cloud gaming is a likely no-go no matter how much further it may improve.
    Reply
  • DavidLejdar
    Yeah, the latency seems to be quite an issue. On the other hand, perhaps it would be technically possible to develop a buffer (even in form of a PCIe card or similar for console, of which the gamers are arguably more of an audience for a game streaming service) - a buffer, as in when e.g. turning in a first-person game, that the graphics for that would already be on the local device? That way the environment would always be pre-buffered, and multi-player actions would go through the server as usual anyhow.

    In any case, it sure doesn't sound as if there would be a huge improvement in such regard in the very near future.
    Reply
  • Kamen Rider Blade
    Cloud Gaming is also the doorway for big Gaming Publishers to strip away ownership of Physical Media.

    Something these Game Publishers would LOVE to do.

    Sorry, I want ownership of my games for the rest of eternity.

    I hope the laws of Reality/Physics kicks your arse and makes Cloud Gaming Non-Viable for the rest of eternity.
    Reply
  • InvalidError
    Kamen Rider Blade said:
    Sorry, I want ownership of my games for the rest of eternity.
    I wish for the same, though it may be difficult if not impossible with more games having components that require an always-on connection and are effectively dead when the game developer or publisher decides to axe the servers.
    Reply
  • Kamen Rider Blade
    InvalidError said:
    I wish for the same, though it may be difficult if not impossible with more games having components that require an always-on connection and are effectively dead when the game developer or publisher decides to axe the servers.
    Yeah, I'm not a fan of those aspects. I miss the good ole days of "Self Hosting" servers in the 90's
    Reply
  • husker
    What baffles me is why anyone thought it could work in the first place for something other than turn based (or very relaxed input timing) games. The only thing that makes sense to me is marketing departments and clueless executives going over the heads of computer science professionals to tout this nonsense. I've posted (and others probably as well) over a year ago that the latency issue alone makes it a fool's errand. Latency exists, not because we haven't written the correct bit of tricky code, but because it is a fundamental part of reality. It's like someone telling you they have a great service if they can only solve the issue of gravity existing on Earth. Why even bother listening to anything else about their pitch until that pesky anti-gravity thing is for real.
    Reply
  • JamesJones44
    They're not wrong about this. Until they solve some of the latency issues there is no way this is a drop in replacement for a console/downloaded games.

    Also, I don't really see how this is related to Activision. If Microsoft were to somehow succeed with xCloud in the way Netflix did with video streaming, what they have as exclusive titles isn't going to matter. It would put immense pressure on Sony and Nintendo without it.
    Reply