Microsoft inks another cloud gaming deal after the UK blocked its Activision takeover

Despite suffering a significant blow this week in its attempt to take over Activision Blizzard, Microsoft still believes it can get the job done. The company has signed a 10-year agreement with Spain-based cloud gaming provider Nware to make PC games it builds in-house available to stream on that platform, along with Activision Blizzard titles if and when the $68.7 billion deal goes through.

"While it's still early for the emerging cloud segment in gaming, this new partnership combined with our other recent commitments will make more popular games available on more cloud game streaming services than they are today," Microsoft president and vice-chair Brad Smith wrote on Twitter. "We are full speed ahead in our mission to bring players more ways to play their favorite games," Microsoft Gaming CEO Phil Spencer added.

In a similar fashion to NVIDIA's GeForce Now, Nware offers users access to a number of their game libraries via the cloud including those from Steam, Epic Games and Ubisoft. Users can use the service to stream their games on Windows PCs, Android smartphones, tablets and smart TVs.

The latest agreement follows similar deals Microsoft has struck with Nintendo, Steam, NVIDIA, Boosteroid, Ubitus and EE to make its games available on those companies' platforms. Microsoft says it has offered Sony, the biggest opponent of the proposed Activision merger, a 10-year agreement to keep the likes of Call of Duty on PlayStation. However, Sony hasn't taken up the offer.

These partnerships are part of a charm offensive Microsoft and Activision have been carrying out in an attempt to win over antitrust regulators. European Union officials will decide whether to rubber-stamp the blockbuster deal by May 22nd. Reports suggest that the European Commission will approve the acquisition.

However, Microsoft and Activision ran into a major obstruction this week when the UK's Competition and Markets Authority (CMA) blocked the deal. The watchdog voiced concerns over Microsoft's dominant position in the cloud gaming market.

Documents submitted to the CMA showed that Microsoft already had a cloud gaming market share of between 60 and 70 percent in 2022 — that was before Google killed off Stadia, which had under five percent of the market. Smith has attempted to counter the CMA's concerns by claiming that Microsoft's infrastructure only allows it to offer cloud gaming access to a maximum of 5,000 concurrent users in the UK.

Microsoft and Activision Blizzard plan to appeal the CMA's decision, a process that may take many months. The companies had hoped to close the deal by this summer. In December, the US Federal Trade Commission sued to block the takeover. The case is set to go to trial in August.