Barely a week after Take-Two Interactive acquired mobile game developer Zynga for a massive $12.7 billion, tech giant Microsoft pulled out a show-stopping move. It was announced in January that the company that brought you Call of Duty and World of Warcraft would join the Microsoft family. But what does this shift in gaming power say for the future of Web3 and the evolving metaverse?

Microsoft’s acquisition of Activision Blizzard is the most expensive deal in game development history at a whopping $68.7 billion. This merge will create a massive opportunity for Microsoft to grow the Xbox Game Pass library. However, this growing power in gaming development could close doors for third-party developers in the future, particularly smaller independent companies, and make distributing new games a lot harder.

Acquisitions and mergers are becoming more and more common in the gaming industry. But conglomerating massive studios and publishing platforms under one roof could be a step toward monopolising the incoming metaverse.

This hasn’t gone unnoticed by the Federal Trade Commission, and the deal will be reviewed before approval. FTC chair Lina Khan has previously sued to block two major takeovers and only recently announced plans to toughen merger reviews which could affect this deal as they investigate whether the acquisition will harm competitors. To factor in this review, Microsoft has planned a timeline to complete the deal by the end of 2023.

In this post, we’ll discuss the evolution of cloud gaming, the cracks in a centralised system and how these growing gaming monopolies may come into play when it comes to the metaverse. Since ‘gaming is how most people are going to step into the metaverse for the first time.’   

A brief history of cloud gaming

For years now, there has been a trajectory toward cloud gaming, bubbling away in the labs of gaming giants. A timeline began way back in 2000 when Finnish start-up G-Cluster announced the first cloud gaming technology at E3. Since then, video gaming giants have grappled their way toward cloud gaming projects of their own. Today, three of the biggest names, Sony, Google and Microsoft, all have their own creations available to the public. But how do their journeys compare to one another, and how will their futures tie into the metaverse?

Sony kicked off its entry into cloud gaming shortly after acquiring Gaikai, who had already begun developing cloud gaming software. In 2014 they announced the PlayStation Now service, which would allow members to stream PS2, PS3 and PS4 games on their PlayStation 4, 5 and PC. By 2015, Sony’s PlayStation Now was opened to public access in America and the UK before slowly rolling out to Europe in 2016 and Japan in 2017. They’ve announced plans to discontinue this service in recent years, merging it into the PlayStation Plus tiered model.

Google had similar plans with ‘Project Stream’, which eventually evolved into the Stadia, the cross-platform cloud gaming service we know today. Publicly launched in select countries in 2019, Stadia was hit with mixed reviews, with much criticism toward the content library and falsely promised features. However, the Stadia controller has been commended for its versatility to connect with different platforms and other cloud gaming services like PC gaming on Steam or Xbox Cloud Gaming.

Alongside Stadia, Google slowly built a team of games developers and established Stadia Games and Entertainment which focused on the internal development of games for the cloud gaming software. However, this was cut short last year when Google shut down the division, affecting 150 employees. They decided to make the platform more amenable as a publishing platform for other third-party developers, seemingly in the opposite direction to where Microsoft is heading.

What we know of Xbox cloud gaming today has been in evolution for a long time now. When Phil Spencer took over as Head of Xbox Brand in 2013, he brought ideas to revolutionise the way people game. A desperate attempt to steer away from the entertainment system sell that former head of brand, Don Mattrick, had previously placed on the company during the launch of the Xbox One.

One of these ideas was creating a gaming rental service, code-named Arches. At the time, Spotify and Netflix were thriving in their respective industries and proving the success of subscription models for entertainment services. This prompted Microsoft to pivot in the same direction. However, this new direction came with a lot of criticism from games developers, questioning the pricing of the service and the model’s success rate when applied to gaming.

Alongside this, Microsoft’s child company Rare worked on a multiplayer game known as ‘Rare Next’ which later developed into Sea of Thieves, the first first-party game to be released on Xbox Game Pass as a day-and-date release. Another strategy taken from entertainment streaming services in the past. The Xbox Game Pass was rolled out in 2017, first for Xbox Insider members, then for Xbox Live Gold Members, and then, beyond.

To date, the subscription service has surpassed 25 million subscribers, completely eradicating any doubt in the system. These figures were announced on the same day as the biggest acquisition in gaming history.

Microsoft’s Xbox Cloud Gaming came into fruition around the time backwards compatibility was developed. The team realised the ability to provide a game without its respective console and got to work determining the feasibility of cloud gaming. As the Game Pass was introduced, this cloud gaming team grew as the technology seemed successful.

Xbox Cloud Gaming was demonstrated in 2019 with the racing game Forza Horizon 4 being played on an Android smartphone with the use of an Xbox One controller. Microsoft highlighted that their already growing Game Pass library would give it the edge over Google’s Stadia library. The service was finally released to select countries in 2020, available on some Android devices and boasting over 150 games at launch, with plans to expand the availability in coming years.

The service was a hit, and it’s been noted that quality doesn’t drop when in transit, on a bus or in a car, and that games load up quicker since the service is running on a powerful remote server compared to the typical hard drive in a console. Could this mean a step toward a device-less future for gaming? And if so, how will the cloud-based servers hold up in the coming metaverse?

A glitch in the metaverse

If gaming did become completely cloud-based, there would be pressure on the systems providing the cloud infrastructure, an area of tech already displaying faults with sporadic outages throughout the globe. What catastrophes would we see in the metaverse if it remains reliant on the current cloud framework?

As previously discussed in our deep dive on the fragility of centralised clouds, last year saw numerous outages among tech companies that disrupted workplaces, social media platforms and news outlets, further indicating that the current infrastructure of the web is not fit for purpose.

But with the push toward a working metaverse, there are ways these companies need to acclimatise to create a secure and trustworthy digital world. For Neal Stephenson’s imagined ‘metaverse’ to come to fruition, we first need to evaluate how we provide every aspect of the digital world today and decentralised cloud computing that resolves this dilemma.

Distributing cloud services across multiple providers can add a layer of security and prevent future outages from seriously impacting how a company works. For example, solutions like the Cudos network can distribute these cloud computing demands across the globe, utilising the resources of a range of devices, significantly lowering the chances of disruption or an outage. Having a decentralised cloud system can also increase the performance of the service since the scale of the network is widespread and not limited to local destinations.

It’s moving toward these ways of computing that will make the metaverse a stable place to be, and with the cloud services market set to grow five times by 2030, decentralised cloud computing is increasingly relevant.

A vision for the future of gaming

At Facebook Connect 2021, Mark Zuckerberg stated, ‘at the end of the day, it is really the creators and developers that are going to build the metaverse’ and highlighted how critical it is these ‘creators and developers can make a living’ in the new digital space.

But with growing monopolies in the tech and gaming industries, it seems there is less space for independent developers to thrive. Microsoft clearly defined their acquisition of Activision Blizzard as not just growing their gaming empire but a step toward establishing a foothold in the metaverse. This could mean a massive control over how we pay for and experience the metaverse as we enter Web3.

Could this be a step backwards for smaller and independent companies with less power within the gaming and tech sphere and thus less presence in the evolving metaverse? Blockchain has been the answer to many of these worries. A decentralised and secure way to create and play new games, blockchain gaming is revolutionising the world of gaming.

For the metaverse to work for all, there should be a broader sense of freedom to create and develop without the grasping control of other companies dictating the infrastructure of the digital world. At Cudos, we believe in this creative freedom and advocate ways where creativity can flourish without the control of external forces.

There are many ways to get involved with us, to help us build this sustainable and user-friendly future in gaming. Build on the Cudos Blockchain, get updates and support from our Discord community, or register your interest in joining our compute network so you can be a link within the decentralised future of gaming.  

About Cudos

Cudos is powering the metaverse bringing together DeFi, NFTs and gaming experiences to realise the vision of a decentralised Web 3.0, enabling all users to benefit from the growth of the network. We’re an interoperable, open platform launchpad that will provide the infrastructure required to meet the 1000x higher computing needs for the creation of fully immersive, gamified digital realities. Cudos is a Layer 1 blockchain and Layer 2 community-governed compute network, designed to ensure decentralised, permissionless access to high-performance computing at scale. Our native utility token CUDOS is the lifeblood of our network and offers an attractive annual yield and liquidity for stakers and holders.

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