On 8 March 2023, Geradin Partners is hosting the first ever legal event discussing the competition and regulatory aspects of cloud gaming. A stellar cast of experts from the gaming industry and the competition community will discuss the great potential this technology brings, and how it can develop on a level playing field.
Gaming plays a huge role in the technology, user experience, design and distribution models underpinning digital markets. It is expected to become even more important as we move to new ways of experiencing the internet (the Metaverse).
Cloud gaming involves streaming games from a remote data centre rather than downloading them and processing them on local hardware. As Damien and I explained in our article published on SSRN last summer, this technology could have a revolutionary impact on how high-end games are distributed, making users less reliant on expensive hardware and expanding the reach of such games.
Despite being a relatively recent development, cloud gaming is already at the heart of the CMA’s market investigation reference following its influential Mobile ecosystems market study, and of the Microsoft/Activision merger which is currently being reviewed by the CMA, European Commission and US FTC.
We are inviting our readers to a discussion of these issues on 8 March 2023 in London. The event will have two panels:
- Cloud gaming – releasing its potential. Jonty Cowan (Wiggin LLP, formerly Electronic Arts), Andrea Coscelli (Keystone and former CEO of the CMA), Joost Rietveld (UCL School of Management) and Stijn Huijts (Geradin Partners) will discuss what the technology of cloud gaming could achieve and what impact this would have on hardware and software makers. They will also explore how the hurdles that stand in the way of cloud gaming’s potential to be released can be overcome.
- Cloud gaming – ensuring a level playing field. Damien Geradin (Geradin Partners), Alison Gold (UK Competition and Markets Authority), Vincent Scheurer (Rebellion Games and TIGA), Cristina Caffarra (Keystone Strategy) and Dr. Friso Bostoen (KU Leuven) will look to the future and discuss how competition law and digital regulation can ensure that as cloud gaming grows in importance, a level playing field is promoted.
You can sign up here.
To make sure readers are up to date before joining the event, we discuss what has happened since we last published about cloud gaming below.
Recent developments
As we explained previously, Apple restricts the emergence of cloud gaming on iOS. Apple effectively makes it impossible to launch a cloud gaming app that gives access to a catalogue of games that can be streamed on the iOS device. Instead, all games must be submitted to the App Store as an individual app. That goes against the very idea of a cloud gaming app which would, like Netflix for series or Spotify for music, give access to a catalogue of games, without each individual item on the catalogue also being available as an individual app.
These restrictions were a new concern raised in the CMA’s interim report in Mobile ecosystems. Since then, the CMA decided to refer these restrictions to a full-blown market investigation, a 1.5 year process at the end of which the CMA can impose legally binding remedies. In our article, Damien and I explained the CMA’s concerns about Apple, but also highlighted that although Google does allow cloud gaming apps on Android, it also imposes restrictions on these apps, namely on the way in which in-game purchases can be completed.
Since then, Apple has appealed the CMA’s decision to make a market investigation reference, alleging that the reference was made after the legal deadline for doing so. If its appeal is successful, this could mean that the CMA has to close its investigation early. However, such a procedural win would not make the substantive concerns around Apple’s conduct go away, and it is expected that regardless of the outcome of the appeal, there will be scope to address these concerns in the European Union under the DMA, and in the UK under the prospective DMU regime, assuming the UK Government presses ahead with this legislation.
Cloud gaming is also one of the areas under scrutiny in the Microsoft/Activision merger inquiry. For example, the FTC raised in its lawsuit against the deal that it could hamper the development of cloud gaming, and the CMA refers to “cloud gaming” an incredible 157 times in its Phase I decision, raising the concern that the merger could lead to Microsoft “leveraging its broader ecosystem together with [Activision]’s game catalogue to strengthen network effects, raise barriers to entry and ultimately foreclose rivals in cloud gaming services”.
The metaverse and other future developments
As mentioned, cloud gaming is about delivering high-end games from “the cloud” straight to a user’s device. This technology of delivering richly designed virtual worlds from remote data centres could also form a central pillar of a well-functioning metaverse. The improvements in network quality and workarounds that are needed to provide a truly seamless experience within cloud gaming will therefore also be key to building a network infrastructure that can support the metaverse. This forms yet another area where today’s demands for gaming demonstrate tomorrow’s more general needs (see also, for example, graphics processing and real-time rendering).
But if we look more to the short-to-medium term, perhaps the greatest promise brought by cloud gaming is that it could make consumers and game developers less dependent on the newest, most powerful hardware. Just like it is not necessary to have the most recent iPad, iPhone or TV to watch Netflix or listen to a song on Spotify, so it will be less important to own the latest console or the newest smartphone to play certain games. As a result, cloud gaming has the potential to break through existing distribution models, bringing games to more people and letting developers access more platforms at a lower cost.
For this, it is essential that current barriers are removed, and that the technology can develop unencumbered by new dominant positions. This is what we will discuss on 8 March in London. We look forward to seeing you then.
The cloud gaming event will take place at One Moorgate Place, 1 Moorgate Place, EC2R 6EA, London, on 8 March at 12.30pm. Register here.
