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Comment by segasaturn | Hacker News Reader

Microsoft is pretty consistently in last place in console market share and the Xbox brand is dwarfed by Sony and Tencent (China).

Microsoft's strong current position in Cloud Gaming isn't because XCloud is devouring all the competition, its because the competition barely exists in the first place. Google and Amazon left their cloud gaming products to rot and GeForce now is very janky (but still quite popular from what I've heard!). Google and Amazon's mismanagement of their products doesn't automatically make XCloud into an aggressive anti-competitive monopoly, especially when you consider the fact that Microsoft inked a 10-year deal with Nintendo's cloud gaming provider to provide Call of Duty to the platform last month.

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As someone who was using GeForce during the pandemic it is a great service but janky is an understatement. There are a huge number of common "edge" cases I've run into: getting long passwords into games, passing mac keyboard commands to essentially windows buttons, etc. Still, it is AMAZING being able to play any game anywhere. But I'm not sure if the market for these products were/are big enough for so many players so pretty much everyone has dropped out.

I don't like this method of measuring a company's competitiveness with how popular they are with consumers. Just because MS can't cobble together a decent product that people enjoy doesn't mean that they should just be allowed to buy sectors of the market until they have a good majority. Maybe they are just releasing shit products despite having as many or more resources at their disposal compared to their competitors.

Picture this feedback loop:

- Microsoft has 20% market share

- Microsoft buys company Y, bringing them up to 35%

- Microsoft ruins company Y's product with their awful leadership

- Microsoft now has 21% market share

You can read the summary yourself if you want, but it's 400+ pages, so might take a while. It's here: https://assets.publishing.service.gov.uk/media/644939aa529ed...

Key takeaways:

> In relation to console gaming services, we found that Xbox (Microsoft) and PlayStation (Sony) compete closely with each other, and that Activision’s Call of Duty (CoD) is important to the competitive offering of each. The evidence suggests, however, that Microsoft would not find it financially beneficial to make CoD exclusive to Xbox after the Merger. We also found that making CoD available on Xbox on better terms than on PlayStation would not materially harm PlayStation’s ability to compete. On this basis, we found that the Merger would not substantially reduce competition in console gaming services in the UK.

> In relation to cloud gaming services, we found that Microsoft already has a strong position. It owns a popular gaming platform (Xbox and a large portfolio of games), the leading PC operating system (Windows), and a global cloud computing infrastructure (Azure and Xbox Cloud Gaming), giving it important advantages in running a cloud gaming service. With an estimated 60-70% market share in global cloud gaming services, it is already much stronger than its rivals.

> We found that the Merger would make Microsoft even stronger and substantially reduce competition in this market.

According to the people who done this research (CMA), they seem to say MS already have a 60-70% marketshare, and making that higher via a acquisition, will make it harder for others to enter the market.

CMA of course cannot make competition to step up, but they can try to stop incumbents from becoming monopolies, which is what's happening here.

This is just my opinion obviously, but I don't think those advantages particularly matter for gaming.

1. Gamers don't want cloud gaming. Latency matters. Cloud gaming is at best an addon for when you can't use your console.

2. Xbox is the least popular gaming platform. If things keep going the way they are I would not be surprised if Microsoft got rid of Xbox before the next console cycle.

3. Windows being the leading operating system has no impact on the gaming industry

This honestly reeks of an analysis done by outsiders that don't actually understand the industry. On the other hand, this consolidation also sucks to see.

Again, CMA is not investigating what matters for gamers or not, but investing what market hold the entity has, if they are likely to abuse it and if the acquisition would make the market hold stronger.

In the case of consoles, their own argument is that no, the market hold would not grow stronger.

In the case of cloud gaming, their argument is that Microsoft already have a strong hold on the market (in the UK) and the acquisition would likely lead to a stronger hold.

Xbox as a console and Windows as a OS and nothing to do with the case they're making.

> This honestly reeks of an analysis done by outsiders that don't actually understand the industry. On the other hand, this consolidation also sucks to see.

Yes, because they are not experts in the gaming industry, they are experts in the industry of businesses in general, and monopolies.

Same could be said about your own argument, it reeks of an analysis done by someone who have no grasp on wider markets and monopolies, but happens to have knowledge about gaming to some degree.

No need to be so antagonistic.

I guess what we disagree on is that conclusion. "Cloud gaming" is not a real market. It's a subsection of the larger gaming market, it will never grow much bigger than it currently is, and by the reports own admission it would be against Microsoft's interests go for anti competitive moves. Unless there's some miscommunication around what "cloud gaming" is, I don't see how their justification makes sense.

On the other hand, while this aquisition might not strengthen the console market, it would go a long way in preventing Microsoft from exiting the market. If Microsoft exits the market that will be a huge blow to gaming, and I would hope regulators can see that.

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