- Microsoft is currently testing Project xCloud, a new technology that will allow gamers to stream Xbox games directly to smartphones and other devices.
- Business Insider spoke with Kareem Choudhry, Microsoft's vice president of cloud gaming, about how Project xCloud will supplement the existing Xbox ecosystem and bring new players into the fold.
- Project xCloud will support all Xbox One games and future releases as well. Choudhry said that the technology will continue to work alongside Microsoft's next-generation video game console, Project Scarlett, when it releases during the 2020 holiday season.
- Project xCloud is just one of several streaming video game services on the horizon. Google plans to launch a new gaming platform called Stadia later this month using similar technology.
- Visit Business Insider's homepage for more stories.
Over the past few years, major improvements in technology and a rapidly expanding player base have left the industry ripe for innovation. Now, there's no shortage of companies looking for a competitive edge in the coming decade, and the video game industry is preparing for its next phase.
Microsoft knows what's at stake. The company has spent years establishing itself as one of the gaming industry's juggernauts and is positioning itself to reach as many of the 2.4 billion gamers around the world as soon as possible. The company's latest technology, Project xCloud, seeks to expand the Xbox brand by streaming Xbox games directly to smartphones and other devices, removing the need to buy Microsoft's signature console.
Streaming video game services are the next big thing for the gaming industry. Microsoft began testing Project xCloud in October, just weeks before Google officially launches its new video game streaming platform using similar technology. While Google's Stadia will have to carve out new space in a competitive industry, Microsoft plans to use Project xCloud to supplement its existing Xbox hardware business and digital sales.
In an interview with Business Insider, Kareem Choudhry, Microsoft's vice president of cloud gaming, said the company has been shifting its gaming business from a product-focused model that was determined to sell consoles to a service-focused model that emphasizes the customer.
Project xCloud is another tool to help spread the Microsoft gospel.
Microsoft has spent much of the last few years struggling to catch Sony's PlayStation 4 in terms of hardware sales with the Xbox One, but the Microsoft's Xbox Live Gold and Game Pass Ultimate subscription services have seen steady increases in revenue.
Choudhry said Microsoft's vision with Project xCloud is to look beyond hardware sales to see how it can provide more value for gamers who choose Xbox and introduce new players to the brand. After all, Microsoft is still planning to release a new console during the 2020 holiday season, Project Scarlett. For Microsoft, cloud gaming technology is just another tool that can help spread the gospel.
"We know we're not going to sell 2 billion consoles. Nobody's going to sell 2 billion consoles," Choudhry said. "But you know, for the people who choose to play on console, we're going to make a phenomenal experience. I love having the Xbox One X on the market; 'the world's most powerful console' is a crown that I intend to retain."
"But for anybody, who perhaps chooses not to have a console — or especially for emerging markets that are PC never, console never, smartphone first — we're leveraging that same hardware investment, leveraging that same community, the same infrastructure as Xbox Live, and the developer ecosystem to reach new customers," Choudhry said.
Project xCloud will make the most of the existing Xbox ecosystem.
Project xCloud is capable of two types of streaming. The first utilizes a cloud-based computer to stream games directly to a mobile device from a Microsoft server. The second allows players who own an Xbox One to connect to their home console using their smartphone for a streaming play session. Both forms of cloud gaming use Microsoft's beta streaming app.
Choudhry said Microsoft's approach to Project xCloud is built on three tenants: content, community, and cloud. The content portion involves making the full library of Xbox games available for streaming, while the community portion is about connecting players within the existing Xbox ecosystem with minimal hassle. Indeed, as soon as I logged into the Project xCloud beta test, I saw that my friends list and save data had already been updated from the regular Xbox account.
The third tenant of the service, the cloud, involves the active integration of Microsoft's Azure cloud service. Only a few computing networks are capable of delivering the data necessary to stream video games and Microsoft is leveraging its experience in the industry to optimize Project xCloud. It's unclear if Microsoft plans to charge for the service, but it's possible for the company to incorporate the streaming service into its existing subscription packages.
Microsoft is focused on making sure games are responsive when streamed, rather than putting an emphasis on graphics.
Google's Stadia has promised to work at variable bandwidths and will support up to 4K resolution while streaming. However, streaming at high resolution has the potential to use tons of mobile data, and maximum quality is difficult to achieve on a 4G connection. Google is charging $10 per month for access to 4K streaming, while streaming at 1080p will be free starting early next year.
Choudhry said Microsoft is actively tinkering to give players an ideal experience on their Android phones during the Project xCloud test and the company isn't too worried about maxing out the graphics for mobile devices. Instead, the test is more focused on making sure that games feel responsive.
"When you're playing on a phone on the small screen, I don't know that 4K really makes a difference," Choudhry said. "We're going to index on the ideal experience for the users, which is interesting — I'll call it golden triangle of video quality, bandwidth requirements, and latency."
Cloud gaming technology has improved, but there are still plenty of reasons to be skeptical of streaming video games.
Streaming video games face greater technological challenges than streaming video or music because of the interactive nature of playing a game. Without a stable internet connection, games streamed from the cloud become unplayable due to intense delays in the controls or tearing in the video. The potential for inconsistency remains with Project xCloud and Stadia, leaving some gamers skeptical of using a cloud service as their primary gaming platform.
Choudhry said he doesn't expect people to drop their traditional consoles or PCs to embrace Project xCloud or other cloud gaming services. Instead, Microsoft wants to provide players with more choice.
"What we're kind of proud of in our approach to streaming is that I'm not out telling everybody why playing on a console or playing on a PC is bad," Choudhry said. "I love playing on a console and on PC today, and it's not for me to go and tell people where they should and should not play. I'm just going to give them more choices of where they can play."
Those who are curious about the future of Project xCloud and other cloud gaming services should pay close attention to Google's Stadia when it launches on November 19.