Microsoft Launches Xbox Cloud Gaming Service

Xbox Game Pass Ultimate Rolls Out Today

Today, Microsoft will launch an Xbox cloud gaming service in 22 countries, including the US. The service, Xbox Game Pass Ultimate, gives subscribers cloud-based access to more than 150 games on Xbox consoles, Android devices, and PCs. It will cost just $1 for a user’s first month, and $14.99 per month after that.

Cloud gaming is booming. This trend has been accelerated by the COVID-19 pandemic, as millions of people look for ways to entertain themselves and their families at home. Analysts expect that cloud gaming revenue will reach $4.8 billion by 2023—up from $600 million this year.

What Exactly Is Cloud Gaming?

Cloud gaming is an online service where games are run on remote servers and players can stream them directly to their devices the way they would stream a Netflix (NFLX) or Youtube (GOOGL) video. This saves players the trouble of downloading games or keeping track of game disks.

Cloud gaming also allows players to access games on a wide variety of devices, including mobile phones and tablets. Cloud gaming does not rely on these devices’ internal hardware to run games.

The Impact on Sony and Apple

Sony (SNE) already offers cloud gaming through its Playstation Now service, though the platform is not available for mobile devices. Microsoft’s move into the sphere may present challenges for Sony.

Apple (AAPL) will also have its eye on Microsoft’s cloud gaming service launch. The service is notably absent from Apple devices like iPhones and iPads. Apple takes a 30% cut from almost all in-app purchases through its App Store, which caused a legal disagreement between Apple and Epic Games, which makes the popular video game Fortnite. Microsoft’s new service may be available on Apple devices after some negotiations, but not for the initial launch.

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