FTC hearing reveals Microsoft was working on a standalone version of Xbox Cloud Gaming

However, the company seems to be stepping back from xCloud


The ongoing U.S. Federal Trade Commission (FTC) hearings over Microsoft’s bid to purchase Activision Blizzard have turned into a treasure trove of information about Microsoft’s gaming ambitions. The latest reveal is that Microsoft was working on a “dedicated xCloud SKU” last year.

As reported by The Verge, the June 22nd FTC hearing revealed the tidbit, confirming the company had plans for a version of its Xbox Cloud Gaming — often called xCloud — that was separate from the premium Xbox Game Pass Ultimate subscription. Currently, the Ultimate tier includes access to xCloud (it also just got a price hike in Canada). However, the keywords here seem to be “had been,” as the company claims its strategy shifted.

Of course, this might not come as a huge surprise to those who have paid close attention to Microsoft’s cloud gaming efforts in recent years. The company previously confirmed it was working on dedicated xCloud hardware in 2021, then later said it was making changes to the device in 2022. Later that year, the alleged game-streaming device appeared on the shelf of Xbox chief Phil Spencer.

So if Microsoft was that far into the development of dedicated cloud streaming hardware, what changed? Well, it seems to be related to popularity, finances, or both — at least, according to Xbox’s head of creator experience, Sarah Bond.

“We’ve continued to get more data about the success and the popularity of xCloud. We’ve gotten more clear on the costs related to it, and we have signed partnerships with others who provide those services,” Bond told the FTC.

Cloud gaming seems to be the crux of the FTC hearing and other regulatory concerns with Microsoft’s Activision Blizzard acquisition. The Verge points out that Microsoft has been strangely quiet about xCloud over the past year. While it could be, as Bond indicates, that the finances of xCloud no longer make sense for Microsoft, I wonder how much of this is Microsoft trying to dodge regulatory concerns over cloud gaming entirely.

Source: The Verge