Microsoft is building its own streaming devices as part of a major Xbox Game Pass expansion

Microsoft wants to bring its gaming subscription service to way more screens using the cloud.

An image showing all the various devices supported today by Xbox Game Pass, including phones, computers, and consoles.

Microsoft is expanding Xbox Game Pass to include streaming devices and smart TVs in addition to phones, computers and consoles.

Image: Microsoft

Microsoft on Thursday announced plans to expand its Xbox Game Pass subscription service to many more screens, including third-party smart TVs and also streaming devices the company is currently building itself. Microsoft intends to deliver its subscription platform on less powerful hardware via the cloud, as it does now with Android and iOS smartphones using a beta version of its Xbox Cloud Gaming service.

"We believe that Microsoft can play a leading role in democratizing gaming and defining the future of interactive entertainment," said Microsoft CEO Satya Nadella in a prerecorded interview with Xbox chief Phil Spencer. "There are really three key areas where we believe we have an incredible competitive advantage: First, our leadership in cloud computing. Second, the resources we have to build our subscription service, Xbox Game Pass. And third, our overall focus on empowering creators."

Microsoft says it's in the process of "working with global TV manufacturers to embed the Xbox experience directly into internet-connected televisions," adding that no extra hardware will be required, save a controller. The company is also "building its own streaming devices for cloud gaming to reach gamers on any TV or monitor without the need for a console at all."

These plans mark a substantial step forward for Microsoft's subscription ambitions and could enable the company to reach additional tens of millions of customers, some of whom may not be interested in a game console but are still enticed by the appeal of a true "Netflix for gaming" platform.

The approach, if successful, could also reduce Microsoft's need to compete directly against Sony's PlayStation. Microsoft hopes that its position in the cloud computing, gaming and desktop operating system sectors means it's uniquely capable of delivering a streaming subscription platform and product experience of this scale where others, like Google Stadia, have struggled.

Someone playing an Xbox game on their Android smartphone using Xbox Game Pass. Xbox Game Pass is available on phones as part of an ongoing beta of Microsoft's cloud gaming platform. Image: Microsoft

Until now, Xbox Game Pass has not worked entirely like Netflix or other video-streaming platforms, instead requiring you download games locally to hardware capable of running it, like a console or PC. That's largely due to video game file sizes and network requirements. But as those technical limitations have begun to disappear, Microsoft is now interested in expanding Game Pass to include smart TVs and streaming devices, as well as mobile phones and web browsers.

That means Xbox games could conceivably be accessible from almost any screen, anywhere, at any time. This represents Microsoft's rather bold vision for the future of gaming, and it stands in stark contrast to the model competitors Nintendo and Sony have stuck with for years now, which has focused on selling hardware complemented by games only playable on said hardware.

Sony in particular is following the blueprint it perfected during the PlayStation 4 years with its successor, the PlayStation 5, and has sold nearly 8 million new consoles as a result. Sony, too, has signaled a major shift in recent years toward software and services, admitting in an investor presentation last month that it's less reliant now than ever before on the traditional console business model. Yet the PlayStation business still does revolve around ensuring consumers buy Sony hardware, remain within Sony's ecosystem and spend a bulk of their money on Sony's digital store.

Microsoft's approach is much more radical and would represent a massive shift in how the company operates in the games business, altering fundamentally how it makes money and how it plans to grow in the future. Microsoft isn't as interested anymore in competing to get as many Xbox devices in living rooms as possible. Instead, Microsoft wants Game Pass subscribers paying it monthly for access to a growing library of games playable on whatever hardware the player chooses.

"We are here to bring the joy and community of gaming to everyone on the planet. To achieve that, our aspiration is to empower everyone to play the games you want, with the people you want, anywhere you want," Spencer said in a statement. "That's a big change from how this industry has traditionally worked. In the past, a lot of game companies have been about locking players into certain hardware and erecting barriers between players."

As of April 2021, 23 million people have subscribed to Game Pass. Growing that number is key to Xbox's future, and it will surely factor into the company's E3 2021 showcase on Sunday, where Microsoft is expected to reveal more information on its upcoming slate of Xbox Game Studios and Bethesda Softworks titles.

Key to all of this will be ensuring the cloud gaming portion of Game Pass grows from a workable beta into a legitimate service. To that end, Microsoft announced Thursday that it's expanding cloud gaming to more countries later this year, including Australia, Brazil, Mexico and Japan. In the next few weeks, the company also expects to expand access to browser-based cloud gaming, which is what brings Game Pass to the iPhone and iPad as well as laptop web browsers, and will be available to all subscribers of its $15 monthly Xbox Game Pass Ultimate tier.

Microsoft says it's also updating its data centers around the world with its latest hardware, the Xbox Series X, to improve performance of streamed games with faster load times, higher frame rates and next-gen optimization for older and existing games in the Game Pass library. And cloud gaming will be integrated into the Xbox app on PC, so players won't need to migrate to a browser, sign in again and load up a game if they want to, say, try something new before they download it.

"Achieving our mission is not going to be easy," Spencer said, "and we have a long way to go."

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