Cloud Gaming May Be Microsoft’s to Lose
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Cloud Gaming May Be Microsoft’s to Lose 
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1. Cloud-gaming enters cloud-computing! What is the scope and potential of this industry?
2. Is Microsoft positioned to emerge as a strong contender in this cloud segment?
Cloud Gaming May Be Microsoft's
to Lose
Software giant is covering all bases with
multipronged approach to videogame
streaming
Gallagher, Dan. Wall Street Journal (Online)
New York, N.Y. [New York, N.Y]12 June 2019.
The future of cloud-enabled videogame streaming remains a murky one. What is clear at this
point is that Microsoft is setting itself up to win—regardless of who else does.
That picture has developed slowly in recent weeks. At the E3 videogame conference this week,
Microsoft shared several planned developments for its Xbox platform . These include a muscular
new console currently under the code name Project Scarlett, which is expected to launch for next
year's holiday season. The company also discussed a project called xCloud, which would allow
users to stream games from their Xbox consoles to mobile devices. No proposed launch date for
xCloud has been given, and the company hasn't specified which mobile devices would be
compatible with the service.
These announcements come just a couple of weeks after the company made a surprise
announcement with Sony —its rival in the game-console space. The two companies said they
would "explore joint development of future cloud solutions" for their respective game platforms.
It is unclear what exactly will result from the unusual tie-up, though the statement did note that
the project would look specifically at the use of Microsoft's Azure cloud service to help power
Sony's "game and content-streaming services."
Two conclusions are evident from the recent announcements. One is that broad adoption of
game-streaming is still a long way off—despite Google's high-profile entry into the market. The
company announced initial games and pricing for its Stadia service last week. But that
announcement proved underwhelming, with Colin Sebastian of Baird noting the "limited
developer support" for the platform, meaning not enough big games. Google made a show of
landing "Destiny 2" for the service, but that game sold poorly enough in its initial launch last
year that Activision Blizzard essentially handed the rights to the series back to its original
developer .
The other conclusion is that Microsoft is spreading its bets. Project Scarlett shows the company
remains committed to the console market, even as it is working on developing cloud services.
Xbox head Phil Spencer even called the new console "the formation of our future in cloud" at the
E3 event. The partnership with Sony, meanwhile, could result in PlayStation traffic boosting use
of Microsoft's corporate cloud services—the company's prime area of focus these days.
Microsoft has made peace with other old rivals such as Apple and Oracle in pursuit of the same
goal.
Microsoft's focus on the cloud has revived its fortunes and helped it reclaim its spot as the
world's most valuable company . And its game business alone has plenty of juice to make cloud
gaming work. Xbox Live now has 63 million monthly active users, and Microsoft's total gaming
revenue for the 12 months through March rose 20% to $11.6 billion, outpacing the company's
overall growth during that time. However cloud gaming eventually shapes up, Microsoft will
most definitely be a player.
Credit: By Dan Gallagher