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Why Microsoft's Xbox 'XCloud' may finally do game streaming right

Xbox One
Xbox One (Image credit: Windows Central)

Microsoft's E3 2018 Xbox press conference wrapped up with big promises, offering a tease of ambitious gaming developments on the horizon. Xbox head and Microsoft Executive Vice President of Gaming, Phil Spencer, touched on plans to deliver its cloud-based "XCloud" game streaming platform, committing to "console-quality games" on any device. It's a big promise, with many having tried and failed in the space, and some major hurdles to overcome.

However, Redmond's proposed solution could deliver a significantly more viable solution to what's on the market today. Microsoft is approaching the technology from a vastly different viewpoint, backed by its colossal cloud infrastructure and nearly two decades of consoles. Here's how the XCloud service comes from a unique place, and why Microsoft can set itself apart from the competition.

Microsoft's Xbox 'XCloud' game-streaming service: Everything we know

Taking control of the cloud

The rise of cloud computing and Microsoft's Azure platform has defined the company's future going forward. Huge investments have been matched with comparable revenue every quarter, sparking a substantial boom in Microsoft's market cap. Roughly 90 percent of Fortune 500 companies now leverage Azure (opens in new tab) among the fierce competition, easily making it as one of the company's greatest success stories.

Although Microsoft's focus continues to shift toward enterprise, consumers can still see the benefits today. In gaming specifically, its touted the adoption of its cloud technologies across a variety of major studios. Ubisoft, Tencent, and PUBG Corp all back multiplayer with Azure, while titles like Crackdown 3 show tighter integration to drive its physics engine.

As a firm leader in cloud computing, Microsoft now looks drive its upcoming game streaming technologies internally. Reports claim that its cloud teams hope to merge four custom Xbox consoles stripped-down into modular server blades, creating the backbone for the new service. Building on strong foundations, it's one of few companies uniquely positioned to build a solution from the ground up. When paired with its team of gaming wizards, Microsoft's cloud expertise goes a long way.

The huge challenges Microsoft faces with 'XCloud' Xbox game streaming

Microsoft, it's not your first rodeo

Halo 4.

Halo 4. (Image credit: 343 Industries)

In its current state, latency is one of the biggest hurdles to overcome for streaming.

This isn't Microsoft's first effort in the cloud streaming space, with several instances of proven technologies that could influence XCloud development. Work on the streaming service can already be traced back to 2013, where an internal demonstration showcased a full-fledged cloud solution for previous generation titles. Microsoft managed to stream Halo 4 for Xbox 360 to both Windows Phone and PC, reducing latency to only 45 milliseconds on a low-cost Lumia 520. In a later interview, Spencer admitted the service was too costly for the time, but recent progress on Microsoft Azure has changed "the economics and quality level."

Last year's acquisition of Mixer (formerly Beam) also hints at a promising future for game streaming, featuring industry-leading low-latency video broadcasting. Using the service's faster-than-light (FTL) setting, streamers can reach audiences in milliseconds, further pushing the service's interactive feature set. Controller sharing even made its debut this year, making it feasible to play games with broadcasters over the internet. It's hard not to draw parallels between these technologies and how Microsoft's learnings with Mixer could be pivoted to XCloud.

Where the money matters

Xbox Game Pass

Xbox Game Pass (Image credit: Microsoft)

As seen across many services, monthly subscription models are seemingly the way forward for monetization. Firms have realized that not only does this secure dedicated revenue for the future; consumers can receive regular updates and support for a flat price. Its arrival has been contested in gaming, yet "games-as-a-service" titles are becoming a norm in the industry.

Microsoft has seen no shortage of success with this model, even adopting core products like Windows 10 and Office 365 to a live service. Xbox Live Gold, Xbox Game Pass, and EA Access are now major pillars of Xbox and even tightly integrated into the Xbox One OS. The same goes for Microsoft Studios-published titles with Halo, Gears of War, and Sea of Thieves seeing similar post-launch support under this vision.

Xbox Game Pass is the archetype of this approach and has the potential to influence the game streaming service. Nearly 200 titles are now among the service's dynamic library, making its $9.99 asking price (opens in new tab) a strong value proposition for new Xbox One gamers. It's unclear how Microsoft plans to monetize its XCloud service, though Xbox Game Pass could be a strong foundation for the system.

Your thoughts

What are you hoping for from an Xbox game streaming service? Drop into the comments section and share your opinion. In the meantime, be sure to check out our comprehensive overview of all the XCloud details so far.

Microsoft's Xbox 'XCloud' game-streaming service: Everything we know

Matt Brown is Windows Central's Senior Editor, Xbox & PC, at Future. Following over seven years of professional consumer technology and gaming coverage, he’s focused on the world of Microsoft's gaming efforts. You can follow him on Twitter @mattjbrown.

28 Comments
  • Now if only my internet at home didn't suck.
  • This is the one thing Microsoft can't control. They can have all the infrastructure in the world but it comes down to home internet betting able to pull this off from Microsoft's datacenter. Following this with great interest and hope they can pull this off 👍
  • Rumor is there'll be two consoles, one traditional and one to accommodate streaming.
  • All good but that console still needs healthy internet to stream.
  • Yeah, ISP's are just beginning to offer gigabit services and not everyone can afford it or even have access to it (heck many areas still dont have cable internet to begin with). I will say in the next decade the internet infrastructure will be better (with the emerging 5G, etc).
  • It will be a hard sell to people like me who have data caps.... It is hard enough to stay under 600gb right now only downloading 1 to 2 games per month and only updating games I am currently playing. I can't imagine how much data this will eat up.
  • The other piece to the puzzle is storage for 1U server racks, Intel has a rulersque ssd that apparently allows for 1 Petabytes of storage in a 1U rack... 0.0. That's absolutely, freaking nuts... around a thousand terabytes and it hopefully means we will get several terabyte ssds at very cheap prices making 128 Gig and 256 gig ssds the norm as low / mid end. Combined with NGSFF we are approaching the cusp of the an era where storage space wouldn't really matter any more - Samsung has a 8 TB NGSFF SSD (11cm x 3.05cm)...8 Terabytes in something the size as a laptop WiFi Module... any smaller and we'll end up with phones with terabytes of storage in a few years. When you think about the rate of progress we had 128 Mb mp3 players around 2006 and 12 years later we have 128 Gig usb sticks approx the size of a 50 pence coin. However there is bottleneck - the undersea internet cables, however given the slow roll out of 1 Gig fibre that provides some leeway for the cables to be upgraded. Not to mention many countries and rural areas of many countries don't have broadband yet.... along with the data caps for those who have broadband.
  • Undersea fiber won't be a bottleneck for "XCloud" as Microsoft has Azure datacenters on every continent where they want to provide services. Just like Netflix does to improve its video streaming, the system will always pick the server the closest to you.
    See Azure map at https://azure.microsoft.com/en-us/global-infrastructure/regions/ The problem isn't only the quantity of data you need to transport, but also its latency.
    Considering even fiberoptic introduces latency at such distances, shortening the distance between servers and clients is a no-brainer for a games streaming service.
    You can use 5µs/km as a rough estimate of fiber latency, so a New-York ↔ London roundtrip would add at least 35ms of delay, this might not sound like much, but for a 60Hz refresh rate, this adds 3 frames between your action and the game's reaction...
    And that is if it's prioritized to travel before any other traffic and considering the lowest physically possible latency of optical networking, current transatlantic links are almost twice as much.
  • When I said under sea fibre will be a bottleneck, I meant if the world started to transfer verrrry large files i.e several terabytes in size. Because the rate storage is progressing it won't be long until we hit consumer ready petabyte drives. So if every person, in every country started sending and downloading files in several terabytes in size the undersea cables will be a bottleneck. Absolute worse case scenario but it's a possibility albeit with a very low probability of occurrence. Think about it, you can already buy several terabyte hard drives for about 50 bucks, yet just over 14 years ago we had about 80 gigs of storage as mainstream mid end and 20gb at the low end. Now we can get 128 gb on very tiny usb stick. Once we hit that 100 terabyte marker, which is way more than enough storage to last anyone with current file sizes. Therefore compression wouldn't really matter to most people (unless by then we have 8 K content but even they will probably be stupidly large in file size). So you'll end up in situation where many people are sending / downloading terabyte files. Therefore to ease that load decentralised sharing will become the norm (torrents). So instead of hosting the files in several dozens of servers. You will get a bulk of them hosting and the rest hosting torrent files (as you need to take into account back ups and redundancy). That is because many people aren't that eager to download content from someone elses pc due to privacy concerns and it would be easier to spread malware that way as well.
  • But game streaming doesn't use that much data... It's essentially just video streaming. And considering how the world consumes YouTube and Facebook video, I don't really think we have to worry about a few gamers slowing down the entire internet.
  • @jodokastlwc. Again, I'm was not refering to xcloud or any game streaming service lol..
  • YouTube and Facebook video are compressed, do you really think gamers are going to want their games looking YouTube quality?
  • If they can play on every device that is connected to the Internet, they won't mind this compromise
  • More subsea lines are being laid, and transport technology is increasing everyday. Besides local continent based servers, subsea lines won't be an issue anytime soon.
  • They have more servers in Africa than they have in Latin America...
  • I bet this launches next e3 on one x. This way they can build the games up and work out the kinks. If not launch than test with insiders. I also bet by new console generation we just mean those games won't work on s or work at a super low quality setting unless streamed. I also bet the streaming device is an s with out the disk drive. X becomes the bottom line and moves to 250.00 s goes away but streaming box is 150.00 and the "Scarlet Console" replaces x at the top. It stays same gen because any game that requires the xboxonexl to play can also stream. Sony I bet cuts the cord with ps4 and even though pro could play those games they won't let it. Just my guess.
  • Maybe the service will be like the advanced vision of We Are Jake (and few others) on Mixer? You can play it on PC, with Gamepad, on Xbox or on Mobile.
  • Check out Liquidsky if you want to see what it'll be like.
  • That's just vid streaming and input device info recording no? Mixer offers game API integration, gamepad sharing, MsStore / XBL account integration and many other unique features.
  • I want to be able to play games of the One/PS4 quality from my tablet when I am on the road, that is what I want from game streaming, I don't need games streamed to a console attached to a TV because I can just download them in that situation and run it from the console. The big area where this will be a failure is online gaming, people already complain about ping, this is going to make things even worse. Anyone running through the streaming console will be a high ping monster and damn near unbeatable.
  • Hoo
  • They can't even get the xbox to stream to a surface over an AC Wifi with sub ms ping smoothly. How are they going to have a chance to do this over the net?!?
  • Yeah, this is pretty accurate, streaming isn't exactly amazing at the moment.
  • WHEN? WE? WILL? SEE? IT? No more questions or comments by me
  • >Console quality
    That doesn't sound very promising lol
  • I really can't stand the thought of streaming live games. Internet sucks for that. If we were all on a gigabit Lan together then maybe. But we're years away from that. In home streaming on the windows 10 app is already sketchy and appears to be abandoned. I hope the streaming experiment fails quickly and we can get on with our next real consoles.
  • Also, to be fair, if they do implement streaming for the next generation, there is literally no reason why those same games couldn't be streamed to an Xbox One, so to force people to buy a new device just "because" is a bit harsh. If they offer the streaming option to Xbox One users, and have the advantage on both newer machines for storage to install (thus utilising the power of the machine and removing latency issues) then it would be a win.
  • Only if they could add this into onecloud or call it onecloud Gaming and include it into a slightly bigger price tier like 19.99 for all the things that onecloud includes talk about a true work and play bundle