Cloud gaming stalls Microsoft-ABK deal, but how big will it be?

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Cloud gaming has become the sticking point for the biggest acquisition in the history of the games industry.

While much of the initial furore was centred around whether Microsoft would make Call of Duty exclusive to Xbox, regulators' concerns about the proposed acquisition of Activision Blizzard have instead settled on the potential impact on competition in the cloud gaming space.

The UK's Competition and Markets Authority believes owning Activision Blizzard and its portfolio, including Call of Duty, will make Microsoft a dominant force in the cloud gaming market, and these are the primary grounds for its decision to block the deal.

The European Commission disagrees, believing Microsoft's remedies of offering free licences to players who wish to play Activision titles they own on the cloud services of their choice – and free licences to cloud services that wish to enable this – will ensure competition in the cloud gaming market remains open.

Either way, the argument centres around the assumption that cloud gaming will become the primary avenue (or at least a significant avenue) through which consumers access video games in the future.

We spoke to leading analysts to get their thoughts on whether this is possible, or even likely, and the implications that has for the industry.

It's first important to define whether 'cloud gaming' is a market in itself. While all the analysts we spoke to agree on the definition of cloud gaming as a distribution method – streaming video games without the need for specialised hardware – there is debate as to whether that constitutes a market in itself.

Ampere Analysis' Piers Harding-Rolls says it depends how