Microsoft’s Strong Relations With Third Parties Give xCloud The Edge Over Competitors

Microsoft have been talking up the potential of their cloud-based streaming service – tentatively titled Project xCloud – a lot ever since they first revealed it to the world, which, they believe, has the capability to match even console-quality gaming on any device through streaming. One of the ways it will be able to do that, according to Microsoft, is through the strong infrastructure they already have in place for cloud with Azure.

However, that’s not the only way Project xCloud is primed for success, according to Xbox boss Phil Spencer. Recently, while speaking at the Barclays 2018 Global Technology, Media and Telecommunications Conference, Spencer talked about xCloud in great detail, mentioning that though Microsoft will receive competition on the cloud streaming scene from the likes of Google and Amazon, Microsoft has the edge over them due to the relationships they’ve built up with major third party publishers like EA, Activision, and Capcom over the course of two decades in the console market.

“When I think about who I see as our long-term competitors in these gaming categories, I think you’re gonna see the big tech companies that Microsoft competes with in many different areas,” said Spencer. “Like Amazon has Amazon Game Studios, which they had for a while, AWS has a very large workload in the gaming space. Google just started working on Project Stream and you can see the work that they’re starting to do to enter this category. Tencent is a huge gaming company.”

“So when I think about some of the strengths that we have as Microsoft, we have been in this space for almost two decades now,” he continued. “We have long relationships with the best content creators on the planet, and their content runs on our platform today. We did some work early on to allow all of their Xbox games to work on today’s Xbox, and our fans love that feature. And it made a ton of sense in terms of we sold more games, we drove more engagement on the platform.”

“When you look at services like Project xCloud, then you start putting the math together and saying ‘okay, now we have thousands of pieces of content from our partners,'” Spencer went on. “They’ve already built this content, and I can basically stream it to any player, anywhere, with any devices, which opens up a huge new market for them. The third-party relationships that we’ve built, not only the games that are under development today, but the past two decades of games that they’ve built on our platform, we’re unlocking new business opportunities for that third-party content.

“We know that our system really only works if third parties are monetizing well on our platform. Our first parties are important here, but the third-party relationships are a critical aspect, and we have strong business relationships with EA, Activision, Take-Two, Capcom… you can go through the whole list, and we have a long, long relationship [with them], and they have shipped thousands of pieces of content on our platform.”

There’s definitely a lot of potential in xCloud, and given how committed Microsoft seems to the entire project, one can’t help but feel optimistic about it. Then again, it’s cloud-based, so there’s bound to be some apprehension over its viability as an alternative to traditional ways of playing games. Either way, we’ll find out soon- public trials for xCloud begin in 2019.