Xbox teases more xCloud 'options,' sees tremendous growth on cloud

Xbox president Sarah Bond says 'new options' are coming to Microsoft's game streaming offerings.

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Microsoft's foray into cloud gaming is far from over. The company is still gung-ho on the nascent technology and hopes to use cloud to accelerate its multi-faceted games business. In a recent interview with Bloomberg Tech's Dina Bass, Xbox president Sarah Bond says that cloud gaming is seeing tremendous growth.

This growth is likely driven by a sharp uptick in Xbox game availability on services like GeForce Now. In an effort to assuage regulatory concerns, Microsoft signed a 10-year agreement to bring Xbox and Activision games to competing cloud services like GeForce Now and Boosteroid. In return, NVIDIA would get a lower Windows license fee. The partnership has born lots of fruit; in 2022, there were exactly 0 licenses for Xbox games that could be streamed on GFN, and as of today, there are 234 Xbox games that can be streamed over GFN.

"We have been investing in [cloud] for some time because we really believe that opening up these beautiful, immersive experiences to more gamers is important for industry growth, for developers," Bond said in the interview.

Bond also teases 'more options' for cloud gaming. This could reference a free, ad-supported cloud gaming model--watch an advertisement in exchange for game play time.

Back in April 2023, the Xbox president mentioned having options for developers including advertisements fueling 'slices of games'. Months later in December 2023, Xbox chief financial officer Tim Stuart also gave an example of watching ads in exchange for free play time.

"We're seeing tremendous growth there. We have more demand than supply in that area and you'll see us rolling out more capacity, introducing more options for people to jump in and play on the cloud."

Bond says that game streaming is actually outpacing the macro-economic games industry. The totality of the industry may not be moving much, but cloud sure is...and Microsoft undoubtedly has a lot to do with that.

"Cloud gaming is growing faster than the overall market. It's really bringing in new players and growth for us. It's an area of investing that we're more and more excited about."

Cloud gaming was pretty small, at least in the 2021 timeframe that was scrutinized during the original merger regulatory proceedings. It was revealed that cloud gaming made around 1-3% of games industry revenues during the European Commission's investigation on the Microsoft-Activision merger.

But those numbers might be outdated, especially now that a significantly amount of Xbox games have started to show up on services like NVIDIA's GeForce Now.