No One Can Predict the Evolution of the Cloud Gaming Market: The Cma, MS, Abk or Third Parties (Page 368)
Cloud gaming is an early-stage and growing dynamic market, and there is considerable uncertainty as to how it will develop and what competing business models will emerge. We believe, for the reasons set out in detail in Chapter 8, that foreclosure of Microsoft's rivals in cloud gaming services may be expected to result in substantial harm to competition in this market. We recognise that we cannot predict with any certainty how exactly the market might evolve absent the Merger (or if the Merger is allowed to proceed on the basis of the Microsoft Cloud Remedy). Neither, in our view, can the Parties or third parties. We consider this represents an inherent specification risk in the Microsoft Cloud Remedy – even if the remedy could be well-specified to cover the current status of the market, it may not be suited to future changes. This means that we cannot have a high degree of confidence that the terms of the remedy would be sufficiently well-specified to address these unpredictable market changes.
The Cloud Remedy Is Hard to Monitor (Page 371)
The remedy essentially proposes that the CMA would oversee various arrangements that seek to regulate the behaviour of global firms in a complex technological sector that is subject to rapid growth, evolving business models and changing commercial practices. Notwithstanding the appointment of a Monitoring Trustee, the Microsoft Cloud Remedy is likely to place significant demands on CMA resources for the duration of its proposed term, principally through the CMA's extensive monitoring and enforcement responsibilities across the broad scope of the remedy, its oversight and governance of the Monitoring Trustee and any of its advisers, and its participation in any dispute resolution process.
The Microsoft Cloud Remedy requires the interaction of a number of third parties and processes (eg Microsoft's Compliance Director, reporting requirements, Monitoring Trustee, third party dispute resolution), each contributing to the monitoring and enforcement of the remedy. While there is a need for the involvement of these different parties, the resulting organisational complexity creates an additional challenge in ensuring that the Microsoft Cloud Remedy is monitored and enforced effectively in the longer-term.
A Third Party (Very Likely Sony) Would Consider to Add Its Own First Party Games on Its Subscription Service if MS Were to Offer Cod on Game Pass (Page 376)
One third party ([REDACTED]) told us that any behavioural commitment from Microsoft to grant rivals access to CoD could pose a risk for consumers, as there are numerous ways Microsoft could withhold or degrade access which would be 'extremely difficult to monitor and police'.
The same third party also told us that adding CoD to Game Pass would be a 'good thing' for existing Game Pass subscribers who play CoD, but that a larger population of [REDACTED] gamers would suffer due to the foreclosure strategies Microsoft could engage in. This third party told us that it would have to consider adding its own first-party content day and date on its subscription platform if Microsoft were to offer CoD day and date on Game Pass, but that doing so would diminish its incentives to invest in its first-party content and would not be good for its gamers.
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