Xbox Cloud Gaming investment is now 'zero' as Fortnite on xCloud flops
Microsoft appears to have given up on cloud gaming in the short term, according to surprising new information from the Xbox leaks.
There’ve been a lot of strange revelations from Microsoft’s legal battle with the Federal Trade Commission (FTC), like that time Sony used cheap marker pens on its documents and accidentally revealed to everyone how much it cost to make The Last Of Us Part 2 and Horizon Forbidden West.
As if in an attempt to outdo them, Microsoft this week managed to leak all its most secret documents to the world, including details about next gen consoles and Bethesda’s future games. They have now all been taken offline but people are still sorting through the information and there’s some very interesting stuff about Microsoft’s Project xCloud.
A newly discovered transcript featuring Xbox boss Phil Spencer, claims that, ‘I would say our investment in specific xCloud is probably in the single digit millions in fiscal year 2023.’
The conversation seems to be from another, unnamed, exec outside of the Xbox division, asking about how much money Xbox is spending on cloud gaming during the financial year that ended this April.
The answer, surprisingly, seems to be almost nothing.
When asked what the plan is going forward, for Xbox Cloud Gaming, the answer from Spencer is even more surprising: ‘It’s unclear. We – as I said, for this year, we’re decreasing investment really to zero as we wait to see if we can find market fit with the service of streaming Xbox games to devices, specifically mobile devices.’
The execs also discuss the initiative from last June, to offer Fortnite via Cloud Gaming – inspired by the fact that it is not available on the Apple App Store. However, Spencer admits that ‘our success there has been fairly marginal.’
However, according to the transcript on ResetEra, Spencer does add that: ‘I fundamentally believe without native mobile games as part of Xbox that we will fail to make traction on mobile devices.’
In other words, he wants exclusive games and killer apps to push Xbox’s mobile content, which he has previously said was the primary reason for buying Activision Blizzard.
Nevertheless, this all seems highly surprising, as it was widely assumed that cloud gaming is central to Microsoft’s future gaming plans – not least because it’s one area that Sony, and Nintendo, cannot compete, since Microsoft is a much bigger company and already has server farms around the world.
Indeed, one of the most significant leaks of this week has been for Microsoft’s next gen console, which seems to heavily rely on the cloud.
However, many have pointed out that regardless of individual services and technologies the fundamental problem with cloud gaming is that it’s entirely reliant on having a consistently fast internet connection, which many cannot guarantee and which is impossible if you’re trying to play while out and about.
Perhaps Wi-Fi infrastructure will be significantly improved by 2028, when Microsoft is apparently planning to release its next gen console, but it’s certainly an issue at the moment.
Microsoft also has cloud services that are unconnected to gaming, which are almost certainly being heavily invested in. But for now it does seem as if Xbox has very little to do with that.
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