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EpicRandy said:

The more I think about it the more it becomes clear Microsoft just needs to kill Xcloud altogether and settle out of court with the CMA to change their decision (which I think is possible as with any other court case).

Xcloud may be a big part of MS's future ambition and especially with the emergent market but right now it's far from rising to the significance of the added value of ABK portfolio to Game Pass and added revenue stream.
It would also:

  1. Boost every third-party cloud provider 10 years deal significance greatly.
  2. Some of those providers and future ones may use the Azure platform anyway.
  3. Increase the production capacity of Series X.
  4. By the same token as no.3 added capacity to grow Game Pass

MS could always reintroduce itself in this venture a few years after the deal is completed when CMA initial assessment of this market is proven wrong. It's not like MS is gonna lose an edge here either as using this as a game pass feature will make it instantly an attractive choice to anyone using cloud streaming then.

Agreed.

Imho...I've doubts that Cloud Gaming will ever take off in a significant way, if it does, it's at least 10 years away and it's heavily dependent on ISPs fixing their shit too. xCloud I can say for 100% certainty is not a viable option for me right now and native hardware will always perform better no matter what.

Stadia died despite being owned by one of the market leaders in Cloud...Because they weren't willing to put the effort in and because their business model was trash. Cloud services which are set as competitors to Console Gaming are likely to fail. Microsoft is different in that they attached xCloud as an addon to Game Pass which is the true business model, not xCloud on its own like Stadia was.

I've strong suspicions that Luna will be next to be killed off.

Really don't think this Cloud market is worth it. If we were to compare the benefits...You're throwing around billions in Activision revenue & profits in favour of a market which has a capacity right now of 5,000 users in UK, Lmao. Understand xCloud is about a future potential but that future may never take off while Game Pass, Consoles and PC are already proven successes.

You can achieve the Game Pass numbers that you want without xCloud, Imho. Maybe they can kill it off and bring it back later as you said.

Ironically this move would hurt the Cloud Gaming market though. You're punishing Microsoft for actually putting the effort in where few others are. Punishing Microsoft to trying to take a risk on a nascent market. However, I'm unsure if CMA would even go for it, they clearly want to block the deal, they'll think of another reason.