Deutsche Telekom pulls the plug on its cloud gaming service

It’s game over for MagentaGaming, which has announced it is shutting down on February 26th.

Once the deadline passes, players won’t be able to access their game libraries and, worse, they won’t be able to transfer their saved games to another service. It means that anyone who has invested hundreds of hours into a game has less than a month to get to the end before all that time and effort is erased forever. That’s going to sting a bit.

“It is with a heavy heart that we have decided to discontinue MagentaGaming,” the company said on its Website (in German). “Our thanks go to all loyal players, partners, friendly streamers and viewers who have made our cloud gaming and its community what it is today. We are happy that you were there and always supported us.”

Deutsche Telekom didn’t provide a reason why it is pulling the plug on MagentaGaming after just two-and-a-half years. In fact, quite the opposite. It insists that “we continue to believe in the growth of cloud gaming services and are still working to provide our customers with the best possible gaming experience on our network.”

Speculation it is then. The obvious explanation is that MagentaGaming is not core enough to Deutsche Telekom for it to justify spending the amount of money it would require in order to grow the service to a size where it can either pay for itself or be sold for a profit.

One clue lies in the game library, which appears to lack the blockbuster titles needed to reel in enough punters. When you consider that Microsoft recently agreed to shell out nearly $70 billion for Activision Blizzard – which publishes various triple-A games like Call of Duty, Overwatch, and World of Warcraft, among others – it gives a sense of how much some companies are willing to pay to own the highest-profile games. Now, Deutsche Telekom wouldn’t need to own a games publisher of course, but even a deal to resell those games would likely come with a hefty price tag.

Another possible explanation for MagentaGaming’s curtailment is that the company that provided the cloud-gaming platform, RemoteMyApp, was acquired last November by Intel. According to a VentureBeat report at the time, RemoteMyApp pledged to honour contracts with existing customers. It’s plausible that the DT deal recently came up for renewal and the telco didn’t like the new terms that were on offer from RemoteMyApp’s new parent. All highly speculative, but if DT isn’t proffering any explanation, this is what we’re left with.

Another point worth making is that when MagentaGaming was first unveiled in August 2019, Deutsche Telekom said it would work on Windows, MacOS and Android, and that support for Xbox and iOS was in the works. However, a month later, Apple launched Apple Arcade, and today, MagentaGaming still isn’t available on iOS. Given the iPhone maker’s reputation when it comes to accommodating rival services on its mobile platforms, MagentaGaming might have struggled to get through the door.

Whatever the reason behind Deutsche Telekom’s decision, cloud gaming was always going to be a tough nut to crack for a company whose core business is not gaming. Its best hope now is that it doesn’t alienate any broadband customers who wake up in late February to discover that in this case, video games really were a waste of time.