Cloud becomes Xbox's bet against expensive consoles

The hardware market is facing a challenging period, with prices driven up by advancements in artificial intelligence. This situation has compelled giants like Sony, Microsoft, Nintendo, and Valve to increase the suggested prices of their gaming consoles. In response to this financial strain on consumers, the recently appointed head of strategy for Xbox, Matthew Ball, sees an opportunity to establish Xbox Cloud Gaming. At the The Games Business Live event, the executive noted that the company has already observed a rise in the number of users trying out their streaming service.

"It’s a terrific time for streaming," stated Matthew Ball. "We’re seizing an opportunity as we have lots of fantastic games, a shortage in console supplies, and it is absolutely clear from the data."

The cloud technology by Microsoft began public testing in 2019 under the codename Project xCloud, officially reaching consoles in 2020 and computers in 2021. Since then, the company has been promoting the idea that streaming is a viable alternative to the traditional ecosystem. Indeed, back in 2025, the former head of the gaming division, Phil Spencer, shared on his LinkedIn profile that cloud gaming hours on Game Pass had jumped by 45% compared to the previous period.

Despite the management's optimism, relying on the stability of external internet connections to support the brand's growth is still a risky game. The Achilles heel of this format has always been latency and network infrastructure, hurdles which the executive swears are gradually diminishing.

Simultaneously, the leadership emphasizes that the cloud won't swallow the physical ecosystem. "We feel very confident about a return to Xbox. We are very clear – I don't want there to be any mistakes about this," assured the strategic director, seeking to reassure the traditional console community.

To try to turn the brand's current financial situation around, the promise is to ensure a reliable stream of exclusive productions. This assurance of robust content is crucial to bolster the platform, but it remains to be seen if the plan will hold up in practice or if players will continue to face the same technical issues of image compression and response delay that have accompanied streaming technology since its inception.