Xbox Cloud Gaming, Microsoft’s game streaming service currently bundled with Xbox Game Pass Ultimate subscription, could someday adopt a freemium model supported by advertising revenue. This possibility was suggested by none other than Microsoft Gaming’s Chief Financial Officer Tim Stuart in a recent interview.
Speaking at the Wells Fargo TMT Summit late last month, Stuart mused about alternative pricing models for Xbox Cloud Gaming tailored to users in developing markets. “For models like Africa, or India, Southeast Asia, maybe places that aren’t console-first,” he said, “you can say, ‘Hey, do you want to watch 30 seconds of an ad and then get two hours of game streaming?’“
His comments indicate that Microsoft has at least explored the idea of subsidizing cloud gaming access in certain regions by inserting ads, similar to how platforms like Hulu offer ad-supported subscription tiers at lower price points. This could increase Xbox Cloud Gaming’s reach in markets where console and gaming PC ownership is relatively low compared to mobile devices.
Stuart’s trial balloon comes at a fascinating juncture in Xbox Cloud Gaming’s ongoing evolution. Earlier this year, sources reported that Microsoft slowed investment in the technology over the past year after scrapping plans to launch Xbox Cloud Gaming as a standalone paid subscription. However, experiments like the current model offering free Fortnite gameplay suggest the concept remains very much under consideration inside Microsoft.
Internal documents from the Microsoft vs FTC antitrust case show Microsoft has mulled bringing PC games into Xbox Cloud Gaming as well. This could exponentially expand its catalog beyond console titles. Early tests of mouse and keyboard support also seem to foreshadow a PC-centric expansion on the horizon.
Of course, whether an ad-based free tier or any of these other enhancements materialize remains to be seen. But Tim Stuart’s comments confirm Xbox Cloud Gaming business model innovation is far from game over. If properly executed, flexible new offerings leveraging ads could help Microsoft achieve its “vision” of streaming immersive gameplay “to really any endpoint that has a browser experience.”
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