- Microsoft is planning to expand its Xbox Cloud Gaming service to include PC games and will use its Azure servers for this move.
- This initiative began when rumors emerged that Google was turning its cloud gaming service, Stadia, into a white-label product.
- Internal emails from Microsoft executives show how their discussions about offering cloud gaming as a Platform as a Service (PaaS) backend and streaming PC native games from Azure GPU SKUs.
Between Xbox and Windows, Microsoft has two of the biggest gaming platforms in the world to its name. The company also has a thriving game streaming service – Xbox Cloud Gaming, but it can only stream titles that are available on the Xbox platform. Now, it has come to light that the tech behemoth has plans to extend its Cloud Gaming service to titles that are available on the PC platform as well.
Microsoft's plans have been brewing for some time. They began in 2021 after news spread that Google would turn its cloud gaming service, Stadia, into a white-label product that other developers can use to offer their own games. Those rumors have turned out to be unfounded especially since Google has since shut down Stadia, but they were enough to spur Microsoft into action on an alternative.
We have this information thanks to the ongoing FTC lawsuit against the company on its Activision Blizzard acquisition. According to The Verge, which obtained internal emails from the case, Microsoft wants to leverage its Azure servers for the plan.
After rumors of Google's plans for Stadia emerged, Microsoft CEO Satya Nadella sent an email outlining his concerns to three of his co-executives – Xbox head Phil Spencer, Cloud Gaming boss Kareem Choudhry, and Xbox Creator Experience boss Sarah Bond.
The email read, "Interesting….. I wonder what this means? Seems like they will have a leg up because their stuff is more generic Linux VMs + Network.... But I am assuming we will do the same for Game Pass PC – right? And if so we can have the same flexibility in terms of offering Cloud Gaming as a PaaS backend as well."
In simpler language, Nadella was concerned that Google's rumored plans for Stadia would give the company an advantage over his company. To nullify this threat, he suggested they do something similar with their Cloud Gaming service and offer it as a product to developers, too.
Less than one hour later, Spencer responded to Nadella's email. The Xbox chief outlined his doubts about the rumored move by Google and, here is the big news, confirmed they were working on streaming "PC native games from an Azure GPU SKU." While he didn't exactly confirm that they will follow Google's steps and offer the service as a white-label product, he admitted it was possible.
Choudhry also weighed in on the conversation and provided more context. He backed Spencer's thoughts and revealed he and Bond were hard at work on a solution to offer PC titles on Microsoft's Cloud Gaming service.
He wrote, "Phil is correct. Sarah [Bond] and I in partnership with Jason's [Zander] team are driving a suitable Azure SKU... as part of a series that will serve the customer demand we see externally for IAAS and to run our xCloud PC streaming stack."
It's been more than two years since this conversation took place, but we still have no indication that Microsoft has made major headway on its plans. However, The Verge confirmed they are still underway. We think the reason for this lack of progress is that Microsoft took its foot off the pedal after the threat of Google offering Stadia as a white-label product went away.
Nevertheless, we hope the company eventually completes its plans as we think a Cloud Gaming service that offers titles across both Xbox and PC will be to the benefit of gamers worldwide.