CMA Fundamentally Misunderstands Cloud Gaming Vs Mobile Gaming

As many outlets have noted, the CMA’s decision is demonstrably bad with many smaller details indicating that they either did not properly understand certain aspects of the video game industry. Some speculate whether that is a real misunderstanding or whether the CMA played around with facts to get to the conclusions they wanted.

Today we’re looking at a part of their decision that demonstrates how they misunderstand the mobile gaming industry.

In page 206 of their decision, the CMA explains why they think cloud gaming won’t be limited by the success of mobile gaming:

“With respect to the Parties’ argument that the increasing computational power of mobile devices will limit the growth of cloud gaming, we note that, whilst the computational power of mobile devices has increased and may continue to increase, cloud infrastructure and hardware will continue to be more powerful with more memory, and therefore offer higher performance gaming.

In the same way that there will continue to be demand for consoles and gaming PCs which are able to offer higher performance gaming than smaller, handheld

devices, there is likely to continue to be demand for cloud gaming which can also offer higher performance from hardware housed in data centres. Playing via cloud also offers additional benefits such as using less battery life as less processing is happening locally.”

So, let’s run down what the CMA is not mentioning or willfully ignoring here, one by one:

For one, the CMA demonstrates a clear misunderstanding of the mobile gaming market. While we now understand that mobile games were not going to replace console or PC games, it’s also well understood that it has created a new product category in the industry that enjoys success completely independent of other segments.

The CMA very clearly underestimates mobile gaming and how it has disrupted the industry as a whole. Many game studios, even companies that have never made games on PC or consoles, have become multimillion dollar companies thanks to leveraging the strengths of the mobile gaming platform.

On the flip side, cloud gaming is yet to truly prove its worth in the industry. Google’s very famous failure in their Stadia business is a recent and clear example that proves this.

The power of hardware used in cloud gaming is not the primary factor to its success, and certainly not in competition with mobile games. The bigger issue remains the availability of internet services to make cloud gaming even possible, much less acceptable as a game experience.

Once again, this is one of many elements that makes the CMA’s decision questionable, and may eventually be a factor when Microsoft’s and Activision’s appeal reaches the Competitions Appeal Tribunal.