Microsoft has not been shy in pushing cloud gaming in recent years. From active advertising campaigns to partnerships with Samsung. They previously went so far as announcing plans to release a dedicated streaming device, before shelving it for the time being. The project was codenamed Keystone.
Along with this, Microsoft described cloud gaming is that it is “new and immature.”
Why The Apparent U-Turn?
In January of this year, Microsoft announced their intended acquisition of Activision Blizzard (Call Of Duty). Whilst the acquisition has been approved by regulators in Brazil and Saudi Arabia, Microsoft have received some push back from UK’s Competition and Markets Authority (CMA).
The CMA are currently conducting an investigation to determine whether or not the acquisition would be harmful to Xbox competitors such as Sony.
Microsoft already has a competitive advantage in cloud gaming according to the CMA. They believe that Microsoft could leverage this together with Activision Blizzard’s vast library of gaming content to shut out competitors from the cloud gaming space.
Is The Cloud Ready?
I doubt that Microsoft is struggling to piece together a dedicated streaming device. But marketing such a device and getting them into the homes of gamers, could potentially play into the hands of the Activision acquisition detratctors. Releasing their own streaming device for the purposes of highlighting their own Cloud Gaming service (which highlights a lot of their own games) may be a bit too much vertical integration for appearances at this strategic moment.
In addition, how could they release a dedicated cloud gaming device like project keystone, whilst simultaneously claiming it is ‘new and immature’?
So, it seems to me that Microsoft’s hands may be tied at the moment. The service is popular and works well. A device that has leaked and been spotted in the home of Phil Spencer. Poised. Ready to go. But, apparently, this is not the right time.
Building an app for other Smart TV platforms (as in their partnership with Samsung) is likely a more palatable move at the moment.
We could potentially see them return to Project Keystone after the acquisition goes through.
