Why Cloud Gaming Isn't a Market

The primary thesis of this analysis is that cloud gaming should not be viewed as a monolithic, distinct market, but rather as a collection of diverse business models and delivery mechanisms. This perspective is supported by expert testimony submitted to the UK’s Competition and Markets Authority regarding the Microsoft and Activision Blizzard merger. The findings suggest that the "cloud gaming theory of harm" used by regulators is speculative because the technology functions more as a feature or a complement to existing platforms than as a standalone product category.

Four distinct sub-markets for cloud gaming are identified: cloud as a feature (bundled services like Xbox Game Pass), cloud as a platform (standalone services like Amazon Luna), cloud as a complement (technologies like NVIDIA GeForce Now that stream existing purchases), and cloud as an input (B2B technology like Ubitus). Data indicates that consumer willingness to pay for standalone cloud services remains low, whereas "cloud as a feature" shows the most significant growth potential by removing barriers like hard drive space and download times for console users.

The scope of the analysis covers global industry trends in the early 2020s, with specific focus on the UK regulatory environment and the competitive landscape between Microsoft, Sony, and Nintendo. Beyond cloud gaming, the findings touch upon social media discovery, noting that Landfall Games achieved 25 million likes on TikTok by utilizing specific viral formulas and recycled content. Additional data points include lifetime sales for Beat Saber reaching $255 million as of late 2022 and the expansion of PC Game Pass into 40 new countries. The methodology relies on qualitative expert opinions, public regulatory filings, and consumer survey data from research firms like Ampere Analysis.