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JWeinCom said:

I expect naught but rational reasoned discourse in this topic.

I think the question itself shows how difficult this is. Think about what the word market, in its most basic non-technical sense means. A market would be a place where merchants and customers exchange goods. In other words, a place of distribution.

Obviously those are not technical terms, but it shows how these two concepts are closely intertwined. A market is at its core all about distribution. So, the line between distribution method and market seems intrinsically very blurry to me.

Colloquially, it has been common to say things like "the used games market", the "home video market", "the rental market", etc. Radio stations and CD stores were both distribution methods but they wouldn't generally be thought of as the same market. I'm pretty sure you could find countless posts on this forum talking about the handheld market, or the mobile games market, etc.

Cloud streaming of gaming is a particularly close case, because if you imagine latency was not a thing, the differences would be almost non-existent between a purchasing a digital copy of a game vs a cloud version of a game. Lag changes things, but whether it's to the point where they shouldn't be considered the same market, I dunno.

My inclination based on zero technical expertise is that I would classify it as its own market. But I think reasonable minds could differ. My question about the decision is more on why the Activision deal would lead to a monopoly in this market.

There are 2 definitions associated with Market.
The first one is like you stated or to use exact wording:
a regular gathering of people for the purchase and sale of provisions, livestock, and other commodities.
"farmers going to market"
an open space or covered building where vendors convene to sell their goods.

I think the definition that better fits the context of regulation would be the other one thought :
an area or arena in which commercial dealings are conducted.
"the labor market"
a demand for a particular commodity or service.

This definition allows for a more granular take on markets like the 'avocado market'.
In this definition, I think it is implied that the name of the defined market pertains to the actual product or service being monetized in some way.

With that in mind, yes there is a cloud market for sure and my op attests to this much (point number 1). But it really is important to distinguish entity that evolved in the cloud market by monetizing the service (Nvidia, Boosteroid ...) and other that does not. The difference is if you monetize it, it is what is bringing in revenue, it is what you have the incentive to innovate in, and it is the incentive you use to attract customers. Whereas if you don't monetize the service then you have other things that bring revenue like a digital or a multi-game subscription service. In this business model, your store or subs is what you want to expand, it is what provides customers the incentive to purchase. The unmonetized streaming feature then is only a selling point to your store/subs which are your actual market. A distribution method to which an exclusive use is entirely dependent on business decisions and not a result of requirements by the content being sold.

Now of course those are only examples to illustrate both ends of a spectrum. In reality, there is everything in-between as an entity can mix both to various degrees. However a business model mixing 2 market does not create a 3rd different one, it is only a model that use both existing one.

This is where I think the CMA definition have some issue. I have no problem with their concern over the cloud market however expanding the definition to cover "other business models" makes their definition reach outside the actual boundaries of the cloud market by including business operations that are evolving in other markets.

The CMA found no issue with digital stores, likewise, they found no issue with multi-game subscription providers. But by their definition, they have an issue if an actor does or adds a cloud streaming feature. There's a paradox here. The CMA has taken issue because the remedies MS proposed only catered to BYOG business as they would have wanted to also support cloud providers with multi-game subscription models and others but again they found no issue with said business models if they don't propose a cloud feature.

This paradox makes it impossible for MS to propose actual remedies without having them address other markets outside the scope of the actual cloud market. In other words, by wanting MS to propose remedies to cloud providers with multi-game subscription services they are not actually benefiting the cloud aspect of those providers but the multi-game subscription one.

Let's say as a thought experiment, that the CMA did succeed and made MS commit to remedies for every business model of cloud providers there can be. What would prevent Epic Store, an actor judged not at risk by the CMA, to add a cloud streaming feature and claim the benefits of MS remedies? Likewise, if the CMA succeeded in forcing MS to license ABK titles to an actual cloud provider with a multi-game subscription service like Luna, what prevent Amazon from dropping Cloud streaming feature afterward or adding a download and install feature?

Now if we take the accepted remedies by the EU. We can see that it does not feature such a paradoxical interpretation. The concern where limited to the cloud market and so is the remedy. Any entity that monetizes its cloud service (has the incentive to add value to the service itself) can make use of and benefit from the remedy proposal free of charge.

So in summary, cloud streaming can be both a market and a simple distribution method, it all depends on what is being monetized. CMA concerns though were requiring MS to address concerns over the Cloud market by encompassing also entities that do not necessarily monetize such services by supporting models that can be majoritarily attributed to other markets.

Last edited by EpicRandy - on 29 May 2023