POV

POV: Microsoft Project xCloud

Background:
Microsoft’s Project xCloud is a new streaming service for gaming which aims to deliver high-end, blockbuster gaming experiences on multiple devices. It is being hailed as ‘Netflix for Games’ by Microsoft CEO Satya Nadella.

Details and Implications:

Similar projects to deliver cloud based streamed gaming experiences already exist at Google (Project Stream), Nvidia (Geoforce Now) and Sony (Playstation Now) amongst others and both Amazon and Verizon are rumoured to be developing offerings.

This is big news for gamers and advertisers alike. First announced towards the end of last year, xCloud removes the need for an expensive gaming unit and instead promises to unlock console quality gaming on any device by allowing you to stream high-end video games anytime, anyplace and on any device.

Think of it as a way to bring the console world of gaming and the mobile world of gaming – until now very separate experiences - into one single world. Xbox leader Phil Spencer, said: "There are 2 billion people who play video games on the planet today. We're not going to sell 2 billion consoles. Many of those people don't own a television; many have never owned a PC. For many people on the planet, the phone is their computer device.”

Project xCloud aims to lower the barrier to entry to high quality gaming and enable brands to reach new audiences. For advertisers, more games and more gamers means more opportunities whether that is bespoke game creation, in-game purchases or content creation around games. The global gaming market was estimated to be worth $137.9bn in 2018 (Newzoo), with over half of that coming from Asia. In-game revenue, which is very hard to quantify, is a huge business globally with brands able to enhance gameplay by offering often unique and limited edition brand content in-game.

xCloud and the other cloud-based gaming projects could also finally see the rise of VR gaming into the mainstream. VR has had two main hurdles; the cost of the hardware and the lack of good, high quality content. New VR gaming content from Microsoft could open a whole new world of content opportunities and drive use and adoption of VR headsets.

On the hardware front, the introduction of high speed 5G networks will free devices from having to do all the processing, enabling the streaming of VR experiences and so the cost of entry to VR around he hardware should fall. Even before 5G arrives, Microsoft has plans to offset speed issues by harnessing its worldwide data centers, matching players geographically with the connection closest to them to ensure no ‘lag’ – the curse of gaming.

There is plenty of competition, but Microsoft is a big player in the market through Xbox and marquee games including Halo and Forza, not to mention its existing Xbox Live connected gaming platform that has 59m monthly active users globally.

Summary:

Mobile gaming, console gaming, eSports and game streaming all offer different and unique opportunities for brands to embrace with a highly valuable and engaged audience that is only going to continue to grow. The new battleground is definitely going to be cloud based gaming services – which should be good news for any brand wanting to connect with its consumers around this content.

Further Reading:

Business Insider | Digital Trends | Bit-Tech | Windows Central