Editor’s note: This article is part of Day 1 (June 22, 2023) of the FTC vs. Microsoft and Activision Blizzard trial.

Xbox Cloud Gaming, also known as xCloud, has emerged as the underdog in the realm of gaming. Sarah Bond, a prominent figure at Xbox, recently revealed that xCloud is the least popular feature among the extensive lineup offered by Game Pass Ultimate. Not only that, but the service is currently running at a financial loss. Bond’s statement came during her cross-examination at the trial between Microsoft/Activision and the Federal Trade Commission, which commenced on June 22, 2023.

In response to queries about the utilization of cloud gaming by Xbox players across various platforms, Bond shed light on the prevailing trend. She pointed out that the majority of users predominantly employ cloud gaming on consoles rather than on mobile devices or PCs. Explaining further, Bond highlighted the convenience of starting a game immediately while it downloads in the background. This console feature, she emphasized, represents the bulk of xCloud’s usage.

Cloud gaming has become a contentious topic in Microsoft‘s legal battles to secure the acquisition of Activision Blizzard. Regulatory bodies such as the Federal Trade Commission and the UK’s Competition and Markets Authority have consistently raised concerns about cloud gaming as grounds for blocking the transaction. Notably, the CMA explicitly referenced the “future of the fast-growing cloud gaming market” when it took a stance against the acquisition.

When questioned about whether she perceived xCloud and game streaming as a separate market, Bond referred to cloud gaming as a feature and a delivery mechanism primarily utilized on consoles. She also acknowledged that the experience of playing streamed games on a different device is not always optimal, as these games were originally designed for the console.

The trial has witnessed other notable revelations, including Xbox’s admission of losing the console wars. Additionally, Matt Booty, another representative from Xbox, disclosed that no decision has been reached regarding a potential release of The Outer Worlds 2 on the PlayStation platform.