Microsoft had been working on a separate version of Xbox Cloud Gaming (xCloud) that would have been independent of its premium Xbox Game Pass Ultimate subscription, according to information revealed during the FTC v. Microsoft hearing. The FTC’s counsel disclosed that Microsoft had developed a “dedicated xCloud SKU” in the previous year.
In September 2022, head of Xbox creator experience, Sarah Bond, expressed Xbox’s strong interest in creating a standalone version of xCloud. This announcement coincided with Google’s declaration of the impending shutdown of its game streaming platform, Stadia. However, Microsoft has recently reversed its decision to pursue this independent version of xCloud due to regulatory concerns surrounding cloud gaming. The company’s change of heart raises the question of what led to this shift in stance since September 2022.
Sarah Bond sheds some light on the matter, stating, “We’ve continued to gather more data about the success and popularity of xCloud. We’ve also gained more clarity on the associated costs and have entered into partnerships with service providers.” This statement emphasizes the importance of data analysis, financial considerations, and collaboration in Microsoft’s decision-making process.
This development is significant in the FTC v. Microsoft case, as it impacts Microsoft’s argument that Xbox Cloud Gaming is merely a feature rather than a dedicated market. If Microsoft had planned to offer access to xCloud in a manner similar to Google Stadia, it undermines their assertion that it is only a feature. Thus, it becomes evident that xCloud was never intended to be just a feature, but rather an independent gaming platform.
Related Post
Kareem Choudhry, head of cloud gaming at Microsoft, expressed the company’s ambition to reach the estimated 2 billion gamers worldwide during the initial discussions about xCloud in 2018. Microsoft’s goal is to make cloud gaming accessible to every gamer, highlighting their commitment to expanding the gaming landscape and reaching a broader audience.
In light of this revelation, it is worth analyzing Microsoft’s strategic motives and the potential impact on the gaming industry. By developing a dedicated xCloud SKU, Microsoft aimed to create a distinct platform exclusively for cloud gaming, separate from its existing Xbox Game Pass Ultimate subscription. This move would have allowed them to tap into an expanding market, offering a competitive alternative to Google Stadia and other cloud gaming platforms.
However, Microsoft’s decision to abandon this separate version of xCloud raises questions about the regulatory and legal challenges it may have encountered. Regulatory concerns surrounding cloud gaming, particularly in relation to competition and market dominance, may have influenced Microsoft’s change of course. As the cloud gaming market continues to grow, governments and regulatory bodies are scrutinizing the landscape to ensure fair competition and protect consumer interests.
Moreover, Microsoft’s decision could signal a strategic shift towards strengthening its position within the Xbox Game Pass Ultimate subscription. By integrating xCloud as a feature of the existing subscription, Microsoft aims to enhance the value proposition of its gaming ecosystem. This move allows them to leverage their extensive library of games and attract more subscribers to the Xbox Game Pass Ultimate.
Another factor influencing Microsoft’s decision-making process is cost analysis. As Sarah Bond mentioned, the company has gained more clarity on the costs associated with xCloud. Developing and maintaining an independent gaming platform requires considerable investments in infrastructure, technology, and partnerships. By integrating xCloud into Xbox Game Pass Ultimate, Microsoft can optimize costs through streamlining and consolidation.
Microsoft’s aspirations to reach 2 billion gamers worldwide remain unchanged, but the approach to achieving this goal has evolved. While a separate version of xCloud may not be imminent, Microsoft continues to expand its cloud gaming presence through strategic alliances and partnerships with service providers. These collaborations enable Microsoft to leverage existing infrastructure and resources, accelerating the growth and accessibility of cloud gaming.
In conclusion, Microsoft’s initial plans for a dedicated xCloud SKU separate from Xbox Game Pass Ultimate have been abandoned due to regulatory concerns and a reevaluation of costs. This strategic shift emphasizes Microsoft’s commitment to integrating xCloud as a feature within Xbox Game Pass Ultimate, capitalizing on existing resources and optimizing the value proposition for subscribers. Despite this change, Microsoft remains focused on expanding cloud gaming and making it accessible to gamers worldwide through collaborations and partnerships.
