Game Pass cloud streaming usage up significantly during holidays, Xbox CEO Phil Spencer says

More users are streaming games from the cloud, giving Microsoft critical optics on the next high-margin business phase: free game streaming with ads.

Game Pass cloud streaming usage up significantly during holidays, Xbox CEO Phil Spencer says
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Senior Gaming Editor
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2-minute read time
TL;DR: Xbox Cloud Gaming has expanded to India, a key mobile gaming market, with Xbox Game Pass cloud usage up 45% year-over-year. Microsoft is testing a free, ad-supported streaming option to boost engagement and monetization, reflecting its strategy to offer more consumer choice and evolve the Game Pass service globally.

Xbox cloud game streaming expands to India, a core market that can be served by free ad-supported streaming options, and Xbox CEO Phil Spencer says usage is already up significantly over last year.

Game Pass cloud streaming usage up significantly during holidays, Xbox CEO Phil Spencer says 11
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Xbox Game Pass is seeing increased engagement across cloud. Microsoft recently rolled out its game streaming program to India--a market that's uncoincidentally dominated by mobile gaming. Reports indicate that Microsoft is currently testing a free, ad-supported version of Xbox Cloud Gaming that could roll out globally, and India seems like a perfect market for the initiative.

Ahead of the expansion, Xbox's Phil Spencer gave some quick metric updates on Xbox Game Pass that confirm increased usage and engagement, both of which are typically precursors for what Microsoft will do next. Spencer says that cloud is ultimately a reflection of Microsoft's push towards choice-driven consumer gaming (a trend that's often synonymous with what Xbox is doing at the time, e.g. breaking exclusivity at the cost of its own personal brand image).

"One way we measure progress is by looking at engagement, and the momentum is encouraging: Game Pass cloud hours are up 45% compared to this time last year, and console players are streaming 45% more on console and 24% more on other devices," Phil Spencer said on LinkedIn.

The engagement is a reflection of both active and potential monetization for Game Pass. Users already have to have a paid subscription in order to stream games at all, and increased streaming usage arms Microsoft with influential data that will guide future evolution of the service, including more tiers like the rumored ad-supported option as well as other iterative developments.

Microsoft has yet to officially announce any sort of free cloud gaming option, ad-funded or otherwise, but the Xbox games division is being stressed by higher-ups to deliver steep 30% profit margins. This has led to significant changes like breaking exclusivity of first-party Xbox games as well two highly unpopular price increases across Xbox hardware and an additional duo of Game Pass price hikes.