back in the game —

Microsoft will have game streaming within 3 years as focus shifts to software

After years of decline, Microsoft plans to invest in first-party game development.

A lot of tech packed into this svelte box.
Enlarge / A lot of tech packed into this svelte box.

Microsoft is renewing its focus on Xbox software and services, according to Xbox chief Phil Spencer speaking to Bloomberg.

The company's original ambition for the Xbox One spanned not just gaming but also a wide range of TV and media capabilities, coupled with a Steam-like download-based distribution model. Sony, in contrast, focused squarely on gaming and had somewhat more powerful hardware to boot. The reaction from the gaming community to Microsoft's plans was hostile, and while the company backtracked both on the media focus and the move away from physical media, the Xbox One has consistently trailed the PlayStation 4's sales.

Microsoft's position was further weakened by a shortage of first-party, exclusive titles. As Nintendo has demonstrated over the years, a solid stable of first-party titles can go a long way toward overcoming hardware weaknesses. But rather than expanding its development efforts, Microsoft has done the reverse: last year it shuttered UK developer Lionhead and Danish developer Press Play.

With the release today of the Xbox One X, the hardware question is resolved squarely in Microsoft's favor; the new console is significantly more powerful both than its predecessor and its major competitor. With this problem out of the way, the time has come for software.

Spencer said that the company is going to increase its investment in developing first-party titles, both creating new studios and acquiring existing ones to write Xbox games. But that's not the only thing in the cards, with a richer set of services also planned. In particular, Spencer said that the company is likely to offer some kind of game-streaming service within the next three years.

Microsoft has had ambitions in this area before. The company considered buying cloud-gaming service OnLive—though eventually Sony would do so—and, in 2013, internally tested a cloud-streamed version of Halo 4. Spencer said that cost and quality concerns had prevented Microsoft from offering such a service in the past, but the massive expansion in Azure, with new data centers being built all over the world, has shifted the balance to make a streaming service viable.

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Channel Ars Technica