SvennoJ said:
They don't need to add fees, just undercut the other streaming services with GPU. To play those MS games on other streaming services you need to pay them and pay MS for playing the games. Either by buying them or via subscription. Now comes xCloud with a lower overall cost since MS can easily undercut them already owning the biggest server farm (which the other streaming services likely rent for their own service, like Sony uses Azure as well). |
Yes, but that's just the reality of every market, MS is gonna own those products so they should be receiving payment every time a license is attributed to a user that's just normal. Now to know if they are going to undercut another streaming service that's not cut and dry. These services still will be bringing in revenue to MS, as you stated because those users need to buy the game through a digital store like Steam or Windows store so the incentive to do so is already greatly mitigated.
The service MS would be trying to undercut is mostly BYOG which means the service itself is their bread and butter, now if you look at GPU, what's is being sold is a catalog of games with cloud streaming as an additional attractive point which means they need to both finance the content and the cloud service itself out of the fee they charge their user while BYOG service only needs to encompass for the cost of the service, I have a hard time understanding how MS can undercut them sustainably considering this and a hard time believing they would be willing to take a loss when they actually still get revenue and extended reach through those third-party.
Xcloud may have a lower cost, but out of all solutions it's one of the worst in terms of latency and performance as of now and this won't change as long as they focus on simply using Series X hardware on a server rack. They won't change that though cause that would remove all their cost advantages. This means competitors should and are already actually competing on innovation/performance.
Also, that's not what the CMA sees, they actually got no problem BYOG cloud streaming service, they judged MS's remedies sufficient in this regard, their problems are because MS did not propose solutions for other business models such as subscription catalog service or digital store using the cloud as their or as part of their delivery. The issue with this is it creates a paradox, it is impossible for MS to propose actual remedies without having them address other markets outside the scope of the actual cloud market which aren't found to be at risk of SLC. 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. e.g. if MS proposes a remedy for digital stores using cloud delivery (aka Stadia before it died) nothing would prevent a store like Epic, not judged at risk of an SLC by the CMA, to add a basic cloud streaming feature and then benefits unduly from the remedy proposal.
The EU did accept the MS proposal because they correctly identified the limit of what is considered the cloud market that does not result in such a paradox
I go at length on exactly that here
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