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Microsoft is building cloud-native Xbox games, but what does that mean?

Microsoft Flight Simulator Vl3 Rain
Microsoft Flight Simulator Vl3 Rain (Image credit: Xbox Game Studios)

Since 2013, Microsoft has touted the "power of the cloud" to deliver the next wave of gameplay innovation to Xbox and Windows PC. Microsoft's prowess in the cloud has yielded many tangible benefits many of us now ultimately take for granted.

I saw a post on Twitter last week describing a scenario where someone was able to retrieve a 12-year old Xbox 360 save, and bring it all the way forward to Xbox Series X gen-9 consoles, using Microsoft's investments in free cloud saves for the platform.

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We also have Xbox cloud gaming, included with Xbox Game Pass, colloquially dubbed "xCloud." You can load up and play dozens of titles from any modern Android device, and soon, any device with a web browser, thanks to the xbox.com/play website. Microsoft is expanding its Azure footprint to new territories too, opening up new data centers in Africa and Asia, with Xbox Series X-level upgrades coming to Xbox cloud gaming in the coming months ahead.

What about cloud as pertains to game design, though? Yesterday, Microsoft revealed it's making some big moves in that space too, picking up where Google Stadia ultimately dropped the ball. Here's what you need to know about its plan to develop "cloud-native" games for Xbox.

What exactly is cloud gaming?

Xcloud Server Blades

Source: Microsoft (Image credit: Source: Microsoft)

In a tweet, Microsoft revealed that it has enlisted the aid of Left 4 Dead and Portal legend Kim Swift, to explore the possibilities of "cloud-native" gaming experiences, but what exactly does that mean?

There are various games out there that use the "cloud" right now, more often referred to as dedicated servers in this instance. World of Warcraft and other MMO realms run on dedicated servers in the U.S., Europe, and other continents, for example. The new Microsoft Flight Simulator parses real-time cloud data and weather patterns, dynamically injecting them into the game on the fly. Some competitive shooters also use dedicated servers, such as Battlefield, which are far more powerful than the instances that can be run on player-hosted peer-to-peer style matches, prevalent in the likes of Call of Duty.

None of these games are cloud native, though. Data on your player's actions and movements may be uploaded to the cloud and then fed back to others in the server. But the graphics, inputs, and usually physics are rendered on the client, which can create a latency gap between different players in the experience. As a basic example, have you ever seen a kill cam in Call of Duty, and noticed that the player on the other end saw something completely different from you? Your positions weren't completely in sync. This is often referred to as a "host advantage," since Call of Duty uses player's consoles for hosting matches, whoever's console is chosen as the host will likely have a more "native" experience than those connecting up to that instance.

Xbox Game Pass xCloud

Source: Windows Central (Image credit: Source: Windows Central)

A cloud-native game is a game that runs in large part, or even entirely, from Microsoft's servers. At a basic level, this is how Google Stadia and xCloud operate today, where you stream the entire game, graphics, physics, and all from a remote server. Google was planning to build cloud-native experiences for Stadia, until it unceremoniously bailed after realizing that game development is difficult and expensive.

A cloud-native game is a game that runs in large part, or even entirely, from Microsoft's servers.

The thing about games on Stadia and xCloud, however, is that the games weren't necessarily designed to be run from the cloud. They are PC and console games that just so happen to be running on servers but don't accommodate the differing gameplay paradigms. For example, the disadvantage of a Call of Duty peer-to-peer multiplayer server is that interaction desynchronization is prevalent, even if the client-side experience often presents as responsive and snappy. A cloud-native game would ensure everyone connecting to the same world would experience exactly that — the same world. The same physics. The same lighting and systems. The same enemy movements, and so on. The challenge there is offsetting input latency, which is noticeable to varying degrees depending on the game.

A cloud-native game would be built around these challenges. Microsoft has explored this a bit with Minecraft Dungeons, which is supposedly designed with input delay in mind for those playing from on cloud streaming services. Today's announcement reveals an intent to invest more in the space, and explore the true potential of this future-facing tech.

What is Microsoft doing to invest in cloud gaming?

Forza Horizon 5 Store Screenshot

Source: Microsoft (Image credit: Source: Microsoft)

Microsoft sees an opportunity to bring gaming to people who don't have, or simply don't want, a high-end console or PC. There are three billion gamers on the planet, categorized as people who interacted with an electronic gaming experience in some form month over month. That can include everything from Counter-Strike to Candy Crush.

Core gamers such as myself and those likely reading this often forget how small console gaming is, relative to the overall pie. Mobile gaming expenditure is gargantuan, and a large part of that spend isn't necessarily because the games are better or more fun — it's because they're more accessible. The devices you already own, right at your fingertips, without significant upfront investment. Microsoft wants to connect this vast audience to traditional console and PC developers and sees the cloud as the vehicle for achieving this.

Microsoft enlisted Kim Swift, formerly of Google Stadia and Valve, to help realize exactly what cloud native gaming may look like. These are games that conform to the dimensions and available inputs of your device and the condition of your connection, wholly agnostic of the relatively rigid confines of the traditional console and PC market.

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Xbox Studios Publishing head Peter Wyse recently spoke to Polygon about Microsoft's efforts in this space. "Microsoft's renewed focus on cloud gaming is similarly aimed at making games more accessible to people who don't have or want a gaming console or computer. The company's next big goal is to create 'cloud-native games.' We don't know exactly what that looks like today, or what that even plays like." Wyse elaborated that Swift is building a team that focuses on cloud-first gameplay, albeit in the early stages.

GamesBeat's majestically-maned editor, Jeff Grubb, reported that one of the games being pitched potentially involves Hideo Kojima, famed for Metal Gear Solid and Death Stranding. There were earlier reports from VGC that one of Stadia's canceled cloud-native experiences involved Kojima, although since denied by Google.

Will it actually pan out?

Source: Microsoft (Image credit: Source: Microsoft)

The "power of the cloud" became a bit of a meme after Crackdown 3. The game's unique selling point was cloud-powered destruction physics, which was admittedly spectacular. The problem being, of course, the underlying game was just sadly quite poor. Servers can render physics several thousands of times more complicated than your home hardware can potentially, but it doesn't make up for what is ultimately a bad game underneath.

Microsoft is on the cutting edge of a new paradigm with its investments in the cloud.

With power-hires like Kim Swift and legendary out-of-the-box thinkers like Hideo Kojima, Microsoft may eventually figure out exactly what this "cloud-native" thing means. By Peter Wyse's own admission, right now, they simply don't know. But that's okay.

When video games flipped from 2D to 3D, it spawned a wealth of innovation that led to a vast array of new genres that are now considered staples. We moved from the neon line art of 1980's Battlezone on the Atari 2600 to the hyper-fidelity realism of Forza Horizon 5, and it sure took a fair while to get there.

Microsoft is on the cutting edge of a new paradigm with its investments in the cloud. That doesn't necessarily guarantee success, as we've seen from the relatively slow uptake of VR, and the collapse of Google Stadia's homegrown efforts. Microsoft is better placed than most to explore and ultimately put this tech to good use, though. Watch this space.

Related: Why Microsoft isn't ditching Xbox consoles for cloud

Jez Corden is a Senior Editor for Windows Central, focusing primarily on all things Xbox and gaming. Jez is known for breaking exclusive news and analysis as relates to the Microsoft ecosystem while being powered by caffeine. Follow on Twitter @JezCorden and listen to his Xbox Two podcast, all about, you guessed it, Xbox!

14 Comments
  • Until global internet infrastructure is >200 mb/s on average or game engine rendering techniques drastically reduce bandwidth (ex. Bethesda's Orion project), cloud gaming will remain a niche in gaming. I'm also tired of hearing about 5G! 5G is completely useless for extended cloud gaming due to minuscule mobile data caps. Right now the best use of the cloud is a hybrid approach... local device does input + rendering with unlimited memory & cpu cores in the cloud used for AI (NPCs & more dense open worlds), physics (fully destructible environments & procedural generation), satellite/street view map data (real life scenery) & real time weather.
  • I kinda agree with you.
  • Microsoft is partnering with telecom companies to offer unlimited data specifically on xCloud. EE in the UK offers unlimited 5G streaming on its network for Game Pass, for example. There's a long road ahead, but they're obviously working on it.
  • Broadband is already a large enough market to market too and if anything, this will just be added pressure for broadband expansion.
  • xCloud 2.0.
    This will be debated for a few days and forgotten for 5 years, until they announce the first cloud games.
    As for what they'll look like, at a basic level tbey'll be DirectX14 games running on dynamically scalable virtual machines. AI-driven NPC chat bots, computer-generated voices and dialogue, dynamic choice driven plot lines where developers don't have to map out up front all allowable choices, just set broad borders. (A friend of mine played MORROWIND by joining the Morag Tong and killing all non-essential NPCs in the game Just to see if she could.) Personalized, persistent private worlds. Gameplay? Well, I don't think the first games will be "classic" MMOGs. Rather they'll more likely be more sedate exploration games, something like MYST. Or SIMS type socialization games. World building colonization games. Immersive free form RPGs. Perhaps a FALLOUT 76-type shared world done right from the beginning. (FO76 was launched as PvP but it quickly became clear that Fallout gamers are sociable and few care about PvP or griefing. Instead, most players routinely help newcomers and prefer the coop challenges.) Persistent world games based on permanent teams. Lots of possibilities. Too many. The first challenge will be figuring out a launch world IP. STARFIELD might be a possibility. In that respect, I would expect the new team to work on the low level toolkits and enlist the game studios to design the actual games. And, of course, open up to other studios but few will bite until MS proves the economic viability of the sector. Main thing is this a seed for the post Series X|S generation and something only MS has the technical, infrastructure, and existing IP resources, to say nothing of deep enough pockets, to successfully do this. Technically LUNA and STADIA can host such games but the risk in the first wave games is too rich for most developers. Even MS can fall flat on their faces but they can afford it. This will be interesting...in 2025.
  • BTW, MS already has an extra perk to deploy for some cloud games: namely, the PC games.
    Console games run on OneS (moving to Anaconda) tech, fixed platforms.
    But PC games don't require a specific platform so they can be hosted on whatever server allows the most extreme settings allowed by the customer's connection. Conceivably a game could run with 64GB of RAM and 50 TF of GPU. :D
    It wouldn't be cloud native but I don't think the gamer will mind.
  • Funny realistic to see a Microsoft Studios for independent studios.
    Interesting in collaboration for games AAA and for little games repartition percentage.
    Thanks.
  • I see this as taking talent away from making great console games from us now. Just like a large chunk of talent has been taken away by mobile phone app making. I've seen the shift where a majority of console players were kids to now adults because the kids are playing mostly on mobile phones. You still have a mix but there has been a large shift from 10 to 20 years ago. I'm just not sure how cloud-native games will fit in. I can see it feeding the mobile sector more than the consoles at home. Meaning less AAA games on console for awhile until it matures. Console users aren't growing as fast as Mobile users and that hurts us console users because everyone will want to invest/program in mobile games. Plus if your connection is poor or don't have one your out.
  • Are you aware tbat XBOX cloud gaming will bring console games to PCs and PC games to consoles? Including previous generations?
    MS has already announced cloud support for the XB1 generation so those consoles will have access to next gen games like FLIGHT SIM and STARFIELD. All the consoles with cloud clents, old and new, will also have access to the full GAMEPASS PC catalog including vintage games lie FLLOUT 1 and 2, and FALLOUT TACTICS, for example. Likewise, older PCs and non-gaming PCs will have access to console games and PC games they would otherwise not have access to. That is a gain, not a loss. However, you are correct that there WILL be a loss: of ports.
    Right now a significant part of each developer spends a good part of their work life porting games from tbe lead platform to the secondary platform(s). As cloud usage proliferates over time the economic value of ports will diminish, freeing up that staff to develop more lead platform games. Higher creative efficiency. Cloud gaming will very slowly limit the spread of cross platform games as game develolers will largest market for sales and address all others via the cloud. In fact, the SWITCH is being supported by some current third party games via discrete cloud apps. Games like Control Ultimate Edition and Hitman 3, and A Plague Tale: Innocence are only accessible via streaming. The choice is to stream or do without. That choice will be all over eventually.
    Eventually. But the counterpoint is that platform exclusivity will go away for games that support cloud streaming. Games that support streaming will be far more accessible than ever before across PC, console, mobile and BROWSER. Plus native TV streaming clients. You are assuming that because streaming started on gaming it will forever stay on mobile.
    Far from it.
    In fact, odds are tbe biggest single "platform" for streaming when the market fully matures (it's currently in beta, whether declared or not) won't be PCs, consoles, or mobile, but rather TVs.
    Gaming everywhere may be today's mantra but the bulk of cloud gaming will nonetheless be in homes. So no, games will not be "mobil-ized" to better suit the cloud market. Rather, Microsoft's effort is more likely to spawn more-sophisticated games than simpler ones; because the games won't be constrained/defined by the hardware presenting them but rather the hardware *running* them.
    That's what cloud native games is about.
  • It sounds great. But we will suffer during the transition (creative talent will be used to port old already played games or simple games to stream at first/many years probably). We are already suffering as die-hard gamers. Just look at the last console release game line up. Worst in history. There was no reason to upgrade to the new Xbox or PS5 on day one, not even six months later. My friends at EA games say that they are getting more done working from home then they ever did going to the office. But that they are not working on AAA games (mobile first). I've already started moving most of my gaming to PC. I can easily stream my PC games to the TV in any room today. And with E3 being a flop, gone are the days...
  • If you can afford a good gaming PC, cloud gaming on TV isn't for you.
    If anything, it is for the folks gaming on phones and tables who can't afford a console.
    (Not everybody but many. I know a few.)
    Spencer said it clearly: Gamepass and xCloud is about expanding the market for the games, od and new.
    (Beyond that, EA is hardly the best regarded game publisher so I wouldn't consider them a bellwhether. Just saying.)
  • It's not that I wouldn't use it, I would. It's just going to take a lot of great talented people away from making great games for us now. Veterans and up and coming talent. And there goes your AAA games. There will still be some, but everyone wants to be at the for front of this new tech and it will hurt us for awhile. Unless Microsoft behind the scenes can make it all very seamless for programmers. It's still a chore to get a console game on PC and vice versa, not as bad as the past, but still a lot of work. Now add the cloud version that has to look good on everything and you got your hands full, which takes time, which takes away from building the next great game.
  • This will work great for India, especially with really cheap Fiber Internet rates, I pay INR 1180 equivalent to USD 16 for a 200 Mbps connection with a cap of 3300 GB per month and a ping between 10-15ms. (This price includes premium subscription to Disney+ Hotstar, the Indian version of Disney+)
    I can see potential for Gamepass, especially cloud streaming.
  • Great editorial Jez!