Xbox head Phil Spencer says it 'makes sense' to bundle xCloud with Xbox Game Pass

What you need to know

  • "Project xCloud" is Microsoft's upcoming game streaming service.
  • It might be bundled with Xbox Game Pass Ultimate.
  • The company doesn't measure success only through consoles sold.
  • Player and subscriber counts are more indicative of Xbox's health nowadays.

At E3 2019, Microsoft unveiled "Project xCloud," its game streaming service which should enter public trials in October. With the release of Google Stadia slated for November, many gamers want to know how Microsoft wants to position itself in the future. Luckily, an interview between Xbox head Phil Spencer and The Verge provided some answers.

Starting with xCloud, Spencer reiterated that it's coming in October, and pricing will be revealed before it launches so gamers know what to expect and how they can sign up. At launch, xCloud will focus on mobile devices like smartphones. He added that combining xCloud with Xbox Game Pass "makes a ton of sense." Given the fact that Xbox Game Pass Ultimate includes Xbox Game Pass, Xbox Game Pass for PC, and Xbox Live Gold, xCloud may be added to the package when it's available as a public trial.

Spencer said the following when he talked about bundling Xbox Game Pass with xCloud.

We haven't talked about the business model yet. We're here with the public preview to let people try it out, which is cool. It's the first time we've had a hands-on for people who don't work at Microsoft, so we're learning a lot and listening a lot. We announced a date for when it's coming, and we will be talking about a business model before it comes so people know what to do to sign up. As you think about a subscription like Xbox Game Pass, I do think the idea of Xbox Game Pass and an xCloud-like subscription makes a ton of sense. Think about what the convergence of those two things looks like. I think it's smart to think about. We haven't announced anything there, but I'd say that idea makes a ton of sense. How do I build my library? Xbox Game Pass is a great way for you to secure a bunch of content. Then, how do I get access to that library wherever I go? Do I use hardware that's Microsoft's or hardware that's my own in my home?

Hopefully everything will be bundled together. That would be an amazing value proposition for gamers and would encourage even more people to subscribe. However, that wasn't all that was discussed in the interview.

Given the fact that Microsoft is releasing games on Xbox One, PC, mobile, and in the future xCloud – not to mention Minecraft on Nintendo Switch with Xbox Live integration – using console sales are a metric for success seems outdated. Spencer said that "how many subscribers you have" and "how many games people are buying" is a better indicator.

You can read his comments on how to measure success below.

If somebody bought an Xbox One X yesterday, I want them to feel completely that they can have a great experience for years and years. I also want to be as transparent as I can with them about the roadmap. So if somebody is sitting on the original Xbox One now, and they're thinking about an Xbox One X, they can make their own decision about what platform they want to have. I don't need to sell any specific version of the console in order for us to reach our business goals. The business isn't how many consoles you sell. The business is how many players are playing the games that they buy, how they play. So if somebody bought an original Xbox One from us on launch day, and they're buying and playing games, I don't need to sell them an xbox One S. I don't need to sell them an Xbox One X. If they want to stay on the Xbox One they have and stay as a great member of our community or subscribe to Xbox Game Pass, that's a great business for us. I think it's easy from the outside to judge the health of our business around how many consoles any company sells. In the end, how many subscribers you have to something like Xbox Game Pass, how many games people are buying, those are much better metrics on the health of the business.

It's always interesting when we get a chance to read interviews with key players behind Microsoft's gaming ambitions. Will you try out xCloud when it's available in October? Do you agree with Spencer's comments that subscriber count is more important to the health of a gaming company due to the shifting landscape? Let us know.

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Asher Madan handles gaming news for Windows Central. Before joining Windows Central in 2017, Asher worked for a number of different gaming outlets. He has a background in medical science and is passionate about all forms of entertainment, cooking, and antiquing.

  • Not really, they can just pay MS to use their servers and have people pay 15 or 20 a month to stream their PS library on their whatever hardware.
  • Which still wouldn't represent as much of a value, and it isn't quite that simple either. There's a lot more that goes into it besides just having available servers.
  • It is a value to the consumer if they don't have to invest in additional hardware to play. It is a value to the company if they don't have to manufacture the hardware to play it. This is why there maybe a distant future where you won't own hardware specific to software.
  • Hardware will always be needed. What do you think games in the cloud run on?
  • Lol probably thin air.
  • On their "whatever hardware". Do you even read? Or do you just spout off one line responses based on the first few words? What I'm saying is that the hardware will be irrelevant if these companies can get their services on your console/phone/PC/Future eyeball device. Do you realize how much money I could spend if I could get a Nintendo service on my Xbox?
  • You are comparing apple to oranges, you can't just add a "cable TV" service and compare it to Xbox Game Pass ultimate. With PS Now you can stream like XCLoud, download PS4 and PS2 games to play offline like Game pass, and to play those games on the PS4 you don't need to get PS+ that is similar to XCloud + Xbox Gamepass + Live Gold (with the caveat being that to play other games online you still need to get PS+) for only 100€ [corrently on sale for 70€]. I still believe that Gamepass is better because of it has more modern games though.
  • This still doesn't get them in trouble, as they will still have revenue coming in. Maybe even more if I can pay to get PS TV and games on my Xbox, which is a consumer they may never have gotten before the change. I'm not disagreeing that the Xbox currently has a stronger game model value (though argueably with less games), I'm simply saying that they will be able to 'compete'. Especially considering they have a TV aspect to their services, which I have forgotten about.
  • Ya they can get in trouble. I think they are already in trouble by charging customers $20 for PS NOW.
  • Can get and are going to be are two VERY different things.
  • @Karl Boerger. Actually, no. Sony unlike Microsoft still has a phone business in the form Xperia phones and they acquired GaiKai ages ago which also geared to stream games. Albeit, they have been rather low key. What Sony lacks is a cohesive platform as a back bone to tie it all together which is another reason why they have been trying to break free from Googles grasp with Tizen and Bixby. Whereas Microsoft has all the pieces except for a in house mobile device. Or perhaps they aren't lacking in that space after all 😋.
  • I just want to let you know that game pass ultimate is actually 14.99 a month not 20 so it's even better savings with for services built in.
  • I can see it going up once streaming is involved. This is hypothetical talk.
  • @Avatar of Apathy. As does any subscription but in this case I don't see it going up more than a few pounds / dollars. Because at one point it becomes less cost effective to buy the bundle and get the services individually by buying discounted add-on cards.
  • So you don't think that this means they can justify the bundle cost going to $20 a month? Especially if they decide to charge $10 a month individually?
  • @Karl Boerger. My company?
    O.O last I checked I was still working for free not the owner of Sony lol! Perhaps you meant it generally but you could have easily said "and if Sony charged" etc etc 😋.
  • Tizen and the Bixby assistant are Samsung products... not Sony
  • @chsoriano. Lol. Yes, you're correct. I can't believe I mixed those two up 🙈. Probably need to start drinking coffee.... Working in social housing is quite exhausting.
  • Called it! 😅. Seriously though it's a no brainer because the two go hand in glove. I also agree subscriber count is a better metric for in regards to the health of a business. Because simply put it's a continuous revenue stream. Secondly, consoles sold is a flaw metric because you can only accurate measure the sale the console in the first instance. There is no way to accurately gauge sales from person to person, charity drives, pawn shop sales - simply put the second hand market without profound breaches of privacy. However your account or rather your gamer tag moves with you from console to console throughout iterations and generations. Therefore providing a better indication of interaction with service whether it's game play, active subscription or purchases even if it's second / third hand games as these become logged in the account history (similar to any digital store that allows you to add third party purchases and PSN also does this as well). So if someone buys a second hand console and subscribes for the first time that's a new subscription not a new console purchase; as Microsoft would have only received whatever monetary value from the initial purchase of that console and subsequent funds from sales of the actual console retained by each party selling the console. Unless of course the console in question was traded in for the next iteration at a Microsoft store.
  • Yes, number of subscribers per month for both gold and game pass would be abetter metric.
    And you know what would be better? Actual income numbers. If a company makes a profit or a loss per quarter. Too bad MS (unlike their competition) refuse to communicate these numbers and only talk of monthly active XB Live users which could include the guy playing minecraft on his switch or android phone, to the guy playing solitaire for free on Windows 10.
  • It's right there.
  • I figured it had to be somewhere... They are a publicly traded company and are required to provide this. While it doesn't actually breakdown the monies (at leaat I didn't see it in the revenue breakdown) for gaming per say, they did summarize it: "Gaming revenue increased 5% (up 7% in constant currency) driven by Xbox software and services revenue growth of 12% (up 15% in constant currency)" This might not be the full financial report though, the end of year one from last year may showore info. It's usually like a book, at least the ones I have seen.
  • Yeah, from what I can tell Microsoft don't really break down their "Other" component like Sony do, they give some input, like whether revenue is up or down but they don't give you figures for each department but it still gives a decent indication of how the department is traveling (especially since Microsoft's "Other" category doesn't encompass as much as Sony's).
  • I'm not talking about revenue but income. Or if it's actually profitable.
    So far I don't think MS ever communicated if XB is profitable or not.
    Paul Thurrott a Microsoft Insider though it never was profitable: That was in 2017. And now with all the studios they acquired, I think it's less likely that they turned a profit since then.
  • I wouldn't waste the time presenting factual information to Guest. I've tried, he just lives in his own little world claiming MS says things that they didn't and does things that they don't.
  • I'm ok with discussing things with guest, he can be a bit full on with his convictions but so can I. And there are a few topics I strongly agree with him on, but that doesn't mean I won't throw in a counter argument on things that I disagree with (namely physical vs digital/streaming we definitely don't see eye to eye on that one).
  • @Sin
    It's totally ok to have different opinions on subjects. I actually prefer to have a mature discussion about gaming so that I can understand the point of view that is opposite of mine.
    Through these discussion in various forums, I actually learn stuff here and sometimes I even change my opinion on some stuff. Personally, I would love MS to actually use number of subscription or income of the service (Actual profit/loss not revenue) as their metric and not active live users which are less relevant.
  • @Axmantim
    I'm someone who doesn't refuse a discussion and I always work with facts.
    Since you like to talk about factual information come on, please provide some.
    Please post:
    1) Number of game pass subscribers per month
    2) Number of gold subscribers per month
    3) Income of the Xbox division or any of these subscription service I you can, I will be happy to apologise to the company you seem to worship and learn something.
    If you can't provide any of these then please stfu and move along.
  • @Sin Ogaris
    I was talking about the income of the Xbox division or how much profit/loss game pass makes because that's what we were talking about.
    MS never communicate these numbers. PS: I'm not talking of revenue but actual profit/loss.
  • Gaming revenue is up and they are one of the most valuable companies in the world. What else are you expecting?
  • @jams
    I'm not talking of revenue. I'm actually talking about income. Profit/loss of the xbox division or of this service.
  • This seems logical, indeed
    Fo now, one pays a connection, an economic model would be to pay according to the game and its community
  • Xbox Game pass Ultimate already now includes PC Streaming at no extra cost. So it's only logical it gets added to that tier for no additional cost either, that would be a major PR win imo.
  • @Karl
    What are you talking about? You don't make sense.
  • You seem to be the only fanboy by bringing up PS Vue when we're talking about video games.
  • Actually, I think technically it's a feature of the regular Xbox Game Pass for console. Or rather, a feature that you don't need a subscription to use. Don't own an Xbox console so I'm not 100% sure.
  • Local streaming xbox to PC is free for anyone with an xbox one and the xbox PC app.
  • @CanadianOne. And you can use your own Xbox one console as a server for free as announced at E3. Which effectively means you can remote stream from your own console for free.
  • Actually, currently you can do in home wifi streaming on any Xbox console. XCloud is going to allow that feature to go remote when it releases in October (I think it's October).
  • Makes a lot of sense. It's actually a "shut up and take my money" situation. It's a logical addition to their view of a gaming ecosystem. And yes, this should have a big impact on gaming as we know it.
  • This makes perfect sense.
    Wanna wait for it to download or wanna start streaming it now?
    Hecking perfect scenario
  • They should just give you the Xbox Live Gold access if you purchase the Game Pass, or xCloud subscription.
  • I figured this was going to be the case, so I'm glad it came true, not that xCloud streaming is feasible where I live yet, but maybe in a few years time.
  • Nothing came true yet though, untill this happens we can't celebrate. There is a possibility that they will see that this server load will be too exhaustive to bundle in the package. Until pricing is announced all of this is speculation.
  • Yeah, I actually had a re read of the comment and he doesn't actually say that xCloud would be a part of Game Pass, only that the combination of Game Pass and an xCloud subscription is a good idea, especially for people who don't have a console. In fact, it really is looking like the opposite is going to be the case, but I'm just hopeful that it at least gets added to GP Ultimate.
  • That I am almost sure it will be, the thing is the cost may increase.
  • Did I miss something? Based on these comments it seems like everyone is inferring xcloud will be bundled with game pass at no extra cost. That was never said as far as I have read. And if they were planning that I would have expected an E3 announcement as it is good PR. Bundling something together does not imply no added cost. Game pass and xbox live just got bundled together, but basically got the cost of each added together. I expect xcloud will get bundled, but it will be $20-25 compared to the current $15 for ultimate. What microsoft decides for pricing is interesting because google is going with free streaming for 1080p, but you have to buy the games on their platform or buy a subscription from someone like ubisoft. I think xbox didnt announce pricing because they are still reacting to Google's potential threat. They may HAVE to offer it at no added fee to compete on price with Google/Ubisoft at $15 a month for streaming+100 games access.
  • Your last sentence also points out another factor why offering xcloud streaming in the ultimate tier is a no brainer.
  • @timcarnes23 You actually have a great point, as when I did the math from what was paying for Gold and console GP, I actually almost doubled (~$8. 5month to the $15, because I got ~$40-42 Gold and $60 GP annual cards) just to get the PC GP ability. The good thing is I upgraded all my time for $1, so just the Gold upgrade alone negated the possible future loss for a time. At this point I am just hoping for some cheap cards for GP ultimate to make it comparable to where I was paying before.
  • Yeah, I initially misinterpreted what he said, re reading it I can see that it's more implying the two services will be separate, but complement one another, especially for people who don't have an Xbox console.
  • They should absolutely bundle it for free with game pass. Not just the ultimate one. I would think that's a minimum. Then there is the next step. Google announce their Stadia base which meant that when you buy a game from Stadia you can stream it without any limit.
    I think MS should try and offer something similar. When you buy a game from their store, you can play it using XCloud without any limit.
  • This would be a true "Xbox Play Anywhere" scenario.
  • They need a separate 'streaming only' sub as well. A lot of people will want smart TV or smartphone access for a cheap no frills way into gaming.
  • I want the Stadia Base model (no subs, free, buy games individually) because that is the most similar to the standard gaming business model without needing to buy a console.
  • This feels like the sort of progression Netflix made when they went from discs to streaming. Honestly, I doubt the cost will go up much past Ultimate's $15, but rather, they might use xcloud as a feature to expand the user base outside of console owners. And really, if you already have Game Pass, and your already using Live for multiplayer, letting you stream is not going to cost MS that much more in terms of bandwidth. They could offer it as an included feature, and make up the difference in increased subs.
  • Only found out today Gamepass Ultimate in the UK is £10.99. That is crazy value. That's Live Gold, PC Gamepass and Xbox Gamepass for that price. Insane. Add in Xcloud to that and literally MS have won the streaming war before its started.
  • Why would a PC gamer even buy a new XB console if all their games goes to PC?
  • I'm not really sure what your comment has in reference to my post? Xbox is available on PC fully moving forward. It would be pretty stupid if a PC gamer having spent thousands on his hardware to then purchase another piece of hardware to play what he already has access to. All he need is Xbox Gamepass Ultimate or GamePass PC.