Google's cloud gaming service Stadia was shut down in January, and while Google managed the process well (opens in new tab) and no one lost out, we now know the big reason why. The UK's Competition and Markets Authority has been in the news for announcing its opposition to Microsoft's proposed acquisition of Activision Blizzard (opens in new tab), and as part of that announcement, it released various statistics about the gaming industry, including the cloud gaming market. Interestingly, it is not a good read for most companies in the industry, with the exception of Microsoft.

The CMA's preliminary findings (opens in new tab) include a section on cloud gaming, which includes statistics on the number of people using various cloud gaming services. The exact number of people is not given, but the market share of each service based on the number of monthly active users between 2021 and 2022 is given as a percentage range, and the report clarifies that these figures are based on information provided directly by the companies involved. In addition, these percentages reflect worldwide usage, not just UK audiences.

The breakdown is as follows: the xCloud name includes a variety of Microsoft services, notably Game Pass, which is probably behind the phenomenal growth seen here.

It does not appear that Stadia got off to such a bad start, but then the number of users seems to have plummeted. It is worth noting that Stadia's numbers for 2022 only go up to July of that year, so the announcement of the service shutdown (which was in September 2022) had no effect on these numbers. 0-5% is rough, and the fact that the service was shutdown in September 2022 does not seem to have had any effect on these numbers.

For Nvidia and PlayStation, the numbers are somewhat brighter through 2022, and while both companies maintain large market shares of 10-20%, you can see why Microsoft's growth here caught the CMA's attention. A single company dominating 60-70% of a fairly developing industry is already looking like monopolistic territory.

However, there are a number of caveats to these figures, even though they are based on data from the companies involved: first, they include services with a cloud gaming component, such as Xbox Game Pass, but they do not reflect whether users of those packages were using the cloud gaming component The first is that the figures do not reflect whether or not the users of those packages used the cloud gaming component. The CMA also believes that double counting users who subscribe to both PlayStation Plus and PlayStation Now may have overestimated Sony's market share in 2021 and 2022.

However, an important point that the CMA makes in relation to the Activision Blizzard acquisition is that even with Google's backing, Stadia could not have made a big enough impression to survive in the cloud gaming market. The evidence suggests that Google's failure with Stadia was "at least partially due to a lack of gaming content, which was related to the use of the Linux OS."

These numbers come from a reliable source, but still, take them with a big pinch of salt: the CMA spent many pages on its findings and exactly what each service offers and what users are paying or not paying for. They warn of the difficulty of salami slicing. One thing is certain, however. In the early days of cloud gaming, Microsoft already looks like it will be number one for some time to come.