Leaked emails from the ongoing FTC v. Microsoft case have shed light on the tech giant’s plans to stream PC games through its Xbox Cloud Gaming service. The emails, exchanged between Microsoft CEO Satya Nadella and Phil Spencer in July 2021, discuss the company’s strategy in response to rumors that Google would be transforming its Stadia platform into a white-label cloud gaming service for developers.
According to the emails, Microsoft aims to leverage its Azure servers to stream PC games via its Xbox Cloud Gaming service. The company acknowledges that Google has an advantage with their use of generic Linux virtual machines and network infrastructure. However, Microsoft plans to adopt a similar approach for its Game Pass PC in order to compete.
The leaked emails also reveal that Microsoft is actively working on developing a suitable Azure server SKU in partnership with Sarah Bond and Jason’s team. This infrastructure will cater to the external demand for Infrastructure-as-a-Service (IAAS) and the xCloud PC streaming stack.
It is not surprising to see Microsoft’s interest in PC cloud gaming, as the company previously announced its intention to support existing game libraries through Xbox Cloud Gaming. However, the promised deadline for this feature’s implementation came and went without an update.
Microsoft’s plans for a dedicated subscription version of Xbox Cloud Gaming have been scrapped. Nevertheless, the company has dropped hints about making PC games available on the platform, especially after signing a 10-year deal with EE to bring Xbox PC games to their customers.
Phil Spencer’s comments on Stadia in the leaked emails suggest that he views Google’s service as lagging behind, and that Microsoft’s main competition in the cloud gaming market is currently NVIDIA with GeForce Now. Spencer expresses surprise at Google’s lack of progress with Stadia and speculates that they may be transitioning towards transforming it into a Google Cloud SKU rather than a first-party consumer service.
As for the future of cloud gaming, it remains to be seen how Microsoft will capitalize on this market and whether the recent shutdown of Google Stadia will impact their strategy.
Sources: FTC v. Microsoft case, leaked emails