During Microsoft’s earnings call for the third quarter on Tuesday, CEO Satya Nadella said that more than 10 million people had used Xbox Cloud Gaming to stream games. Cloud gaming is only known as a part of the $14.99-a-month Xbox Game Pass Ultimate tier, so the fact that the formation was shared Tuesday shows that many people are trying it out.
It’s also an important number in a field with few of them. Google doesn’t share numbers for Stadia, and Nvidia’s numbers for GeForce Now include people who have used a free trial with no strings attached. Microsoft said in January that Game Pass has become so popular that users have grown from 18 million the year before to 25 million.
Again, though, it’s not clear how Microsoft decides what counts as an Xbox Cloud Gaming streamed game, so we don’t know what the number might mean, how many current subscribers are included in that number, or how much playtime is required for the company to count it as a stream.
It would help if you also said that you could sign up for Xbox Game Pass Ultimate for a month for only $1 and then cancel. But again, it’s not clear how many people who did that and also streamed a game might be counted in the number Microsoft gave out on Tuesday.
Microsoft has put more money into Xbox Cloud Gaming, first available on Android, iOS, PC, and Xbox consoles. Because of this, you can now stream many Xbox games on many different devices. Since October, the whole service has been powered by custom Xbox Series X hardware, which has improved frame rates and load times and made it much easier to use.
But the company is also selling a lot of hardware. In March, Xbox had its best sales month in 11 years, and next-generation Xboxes are becoming much easier to find. Microsoft said on Tuesday that sales of Xbox hardware are up 14%. But Microsoft’s CFO, Amy Hood, said that Chinese production shutdowns could hurt future hardware sales by making it harder to get consoles.
Cloud gaming on Xbox
In 2016, Microsoft came up with the idea for the cloud service. Around the same time, Kareem Choudhry worked on making the Xbox 360 work with the Xbox One. As his team worked on this solution, Choudhry wondered if they could offer these games without a console. He asked Spencer for permission to start a small group to find out if cloud gaming was possible.
Around the time that Xbox Game Pass came out, the technology was deemed successful enough that Microsoft put together a bigger team to build the cloud gaming platform. Microsoft criticized the service at E3 2018, and a few months later, in October 2018, they officially announced Project xCloud. In March 2019, they showed how the service worked by playing Forza Horizon 4 on an Android phone with an Xbox One controller.
During this term, Phil Spencer, the head of Xbox, used a private server to test games from afar. In May 2019, the service went through home testing, which meant it could be used outside of a lab. Later, it was tested by the public and shown off at E3 2019. Microsoft said that its service would be better than competitors like Stadia because it had a bigger library of Xbox games.
The hardware was based on Xbox One S blade servers at launch, but in June 2021, the switch to Xbox Series X servers began. For the 2018 teaser, each server had four custom Xbox One S-based divisions. For the 2019 launch of the service, this number was doubled to eight per server in a 2U space. Compared to the standard Xbox One S, the power consumption has been cut by 30% by tuning the power for the processor. To hide latency, the video output is set to 120 Hz.
Microsoft: Put ads in Xbox games that are free to play
Reports say that Microsoft is working on a program that will let brands advertise in free-to-play Xbox games. For example, the ads wouldn’t get in the way of a racing game, but they might show up on a billboard. It’s not clear how else Microsoft plans to use ads, like showing them as skins for avatars or videos in game lobbies.
On the other hand, Microsoft is worried that the ads could “irritate” players, so it plans to build a “private marketplace” where only certain brands will be știible. Microsoft doesn’t want to cut ad revenue, letting the game developer and the ad company split the money. Microsoft might want to use this to get more developers of free-to-play games to join the forum since this would give them a way to make money besides microtransactions.
Microsoft won’t use information from Bing and other services to show more relevant ads on Xbox. The news outlet also doesn’t know if Microsoft has told advertisers about the idea yet, but its sources say that ads will start showing up on Xbox as soon as the third quarter of this year. A Microsoft spokesperson said, “We’re always looking for ways to improve the experience for players and developers, but we don’t have anything else to say.”
We asked Microsoft for a comment, but the company said it didn’t have anything more to say than what it had already said to Insider. In-game ads on console games aren’t a new idea. In the mid-to-late-2000s, game companies tried them out in paid tournaments. Around this time, EA Games teamed up with Massive, an advertising company owned by Microsoft.
This made it possible for companies to put ads in Skate, NHL, Madden NFL, NASCAR, and Burnout Paradise. If you played any of these games at the time, you might remember seeing Obama ads on digital billboards and in digital sports arenas. There were even real billboard ads in Saints Row 2, like this one for Netflix.
Back in the day, ads for real-world products in games might have been something new. Still, since some next-gen games cost close to $70, players expect an ad-free experience. This is probably why Microsoft is only bringing the program to games that are free to play. EA tried to sneak a full-screen, non-skippable ad into UFC 4 in 2020.
But fans who bought the $60 game weren’t happy, so EA took the ad down. Elizabeth Holmes was found guilty of four of the 11 charges against her after a long trial. But this is only half of the problem since Holmes’s business partner Sunny Balwani is also getting ready for the same legal fight.