Microsoft (MSFT) is sitting pretty as a reborn gaming juggernaut thanks to its pending $68.7 billion acquisition of Activision Blizzard (ATVI). The deal, announced Tuesday, gives Microsoft access to Activision Blizzard’s slew of franchises including “Call of Duty: Black Ops - Cold War” and “Call of Duty: Vanguard” two best selling games of 2021, according to NPD Group.

The announcement is a huge blow to Microsoft rival Sony (SONY), maker of the PlayStation, as it means the company could eventually lose access to Activision Blizzard’s properties. “Call of Duty,” for example, has been one of the most played titles for the PlayStation in the past few years.

The deal and its consequences sent shares of Sony plummeting 12% from $124.79 at the close of markets on Friday to $110.02 at the close on Wednesday. The stock recovered slightly on Thursday, rising to $115.24 by midday.

But losing access to Activision Blizzard’s franchises isn’t the only thing Sony has to worry about. More troubling for the company is Microsoft’s up-and-coming Game Pass streaming service, which could serve as the future of gaming for players around the world.

Game Pass Ultimate is a cloud powerhouse

Microsoft’s Game Pass comes in three tiers. The first two start at $9.99 per month, and give players the option to download and play more than 100 games, including new releases, on their Xbox or PC.

The third tier, Game Pass Ultimate, is a potential goldmine for Microsoft. Starting at $14.99 per month, the service lets you play games on your Xbox or PC and, more importantly, allows you to stream games via the cloud to your smartphone, tablet, TV, PC, Mac, or Chromebook. It’s more or less a Netflix for gaming.

The prospect of cloud gaming has been a dream for years. The idea is to let gamers play where they want, when they want, any device they want without the need for pricey consoles or PCs.

Sony currently offers its own subscription services including PlayStation Plus, which allows you to play PlayStation games via the company’s PlayStation 4 and PlayStation 5 consoles, as well as PlayStation Now, which lets you download and stream games to your console or PC, but not your mobile devices.

According to Bloomberg, Sony is working on a new cloud platform called Spartacus that will launch later this spring, and combine the benefits of PlayStation Now and PlayStation Plus, though there’s no word on pricing.

Microsoft, however, also owns its own world-class cloud service in the form of Azure, which allows the company to better power its cloud gaming service.