Project xCloud is Microsoft’s newest strategy to gain an advantage in the big tech battle for cloud dominance. Regarded by many as the future of gaming, Project xCloud’s game streaming service is the clearest demonstration yet of the power of Microsoft’s cloud platform, Azure.

And with Project xCloud’s visibility within tech-savvy communities of gamers and its potential global reach to hundreds of millions of consumers and developers, Microsoft is building the foundation for the rest of its cloud empire.

The Azure cloud will benefit gamers, but developers may be the real winners—Microsoft plans to integrate Azure, Xbox Live, DirectX, Windows, and many of its other services into a well-oiled game development machine.

Aptly known as the Game Stack, Microsoft hopes to build a developer-friendly platform providing developers with the tools they need to get their games into the hands of millions of gamers.

How the unimaginable is now a reality

Project xCloud is an unreleased game-streaming service from Microsoft that will let you play any video game on any device. Games like Forza, Battlefield, and Call of Duty will no longer be locked to a single, physical console—games are instead run in the cloud, with your device acting like a portal to a virtual console. By streaming games from the cloud, everyone can play the same resource-intensive games on everything from their PCs to their phones and tablets.

Halo, the flagship game for Microsoft’s Xbox that defined a generation of gaming—a modern Super Mario or Street Fighter—will now be playable on Apple’s iPhone or Google’s Pixel.

Not too long ago, such a future seemed unimaginable.

Two big things have happened to Microsoft in the last few years that made today possible.

First, Sony’s PlayStation 4, a rival game console, crushed the Xbox One in terms of units sold. The PS4 sold over 90 million units, more than double the Xbox One’s estimated 43 million units. Almost overnight, Microsoft lost its edge in the gaming world—the lead it had achieved with the wildly successful Xbox 360, its previous generation console, quickly evaporated.

Second, Amazon has dominated cloud infrastructure with AWS, relegating Microsoft Azure to a distant second place. With every passing year, AWS doubled in size, growing to revenue of $25B in 2018. Microsoft Azure was left to play catch up.

Two of Microsoft’s most strategic products seemed to be falling behind the competition.

Now these two worlds—gaming and the cloud—are colliding. In a bold maneuver, Microsoft plans to showcase its increasingly powerful cloud on the global gaming stage with the hope of outshining Amazon and Google. Should it succeed, the payoff could be massive.

The ultimate platform for game development

The Microsoft Game Stack brings together a suite of Microsoft tools and services, backed by Azure, to empower game developers, from indie developers to AAA studios.

Game Stack tools make is easy to build, deploy, and operate games. Developers can integrate new technologies, like PlayFab, which is a complete backend for building and running live games.

Game Stack hopes to take advantage of its strength as a platform to become the most robust ecosystem for game development tools served à la carte.

Integrated with these tools is seamless access to a powerful cloud. According to Microsoft, “the cloud plays a critical role in Game Stack, and Azure fills this vital need.”

Game Stack is actually cloud, network, and device agnostic—but seamless integration with Azure makes it the most likely cloud. Attracting a large audience of happy developers and gamers will define the success of Microsoft’s game development platforms.

Prove your cloud worthiness by doing the impossible

According to Microsoft’s Project xCloud promotional video: “There’s two billion gamers in the world. Some of them have a PC. Some of them have a console. Some of them have a smartphone.”

Microsoft shuttered its smartphone business, fell behind in the console wars, and faced a stark decline in PC sales. Microsoft began to look a lot like Halo’s Master Chief defending Planet Reach against the Covenant’s invasion—in other words, not good.

Rather prophetically, Master Chief narrowly escapes destruction to save none other than Cortana herself.

Undeterred, Microsoft set out to redefine its core focus. Computers, consoles, and smartphones can all intersect at the cloud.

What if everybody in the world could play Halo?

Imagine connecting all 2 billion gamers to Microsoft’s cloud.

Gaming is big business. The cloud is an even bigger business.

Project xCloud will be the most visible demonstration of Azure yet—for many, it will be their most obvious and direct interaction with the Microsoft cloud. It will be a clear illustration of Azure’s strength that Amazon and Google will be largely incapable of duplicating.

With Azure at the core of its gaming pursuits, Microsoft plans to amaze consumers around the world, whether they are mobile phone users in South Asia, console owners in North America, or the next generation of Africans coming online in the next few decades. Software developers and technology companies will take notice.

Building the moat for a game-based cloud

Google has teased the world with its own game streaming service, Stadia. Amazon has long been suspected of trying to develop its own service as well. Both companies have minimal backgrounds in gaming.

With no AAA titles, no gaming community, and no nostalgic video game lore, Amazon and Google are highly disadvantaged.

Microsoft hits the sweetspot—and it knows it: “We are a gaming company with content and community. And we happen to also have a great strong first party cloud in Azure.”

Once the savior of humanity and the defender against hostile extraterrestrial aliens, Master Chief might next be assigned the heroic task of ushering in the next stage of growth for the (terrestrial) cloud.

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