Microsoft announces a new cloud gaming division

We had a few hints that Microsoft was interested in cloud gaming. Finally, our predictions have been confirmed with this latest announcement.
Microsoft announced late last week that they’d be launching a new cloud gaming division. According to The Verge, Kareem Choudry will be helming the new cloud gaming division.

Some background

In late January, news went around that Microsoft acquired a company called PlayFab. PlayFab is a company focused on cloud-connected games. Here’s an extract from PlayFab’s About Us page:

PlayFab offers the most complete backend platform built exclusively for live games. Start integrating with your mobile, PC, or console game for free, and go live for a fraction of the cost of one backend engineer. You bring the fun, we’ll do the rest.

The news of this particular acquisition could only mean one thing: Microsoft wants to be involved in cloud gaming. Microsoft is already heavily involved in cloud technologies with Microsoft Azure.
Not to mention, Microsoft also offers Azure Gaming which is its Azure product tailored for game developers.

What is cloud gaming?

Cloud gaming, very broadly, is the concept of hosting storage, processing power, etc. ‘in the cloud’ (i.e. remotely). Think Netflix for gaming as one example. Cloud computing power means that gaming devices won’t need advanced hardware to have top-notch graphics nor would they need terabytes worth of storage. Also, cloud gaming allows you to play a game on any platform with the click of a button – no downloads or high-end hardware needed.
Cloud gaming has several advantages for all people involved in gaming whether they’re a developer, manufacturer or gamer.

What this means for people in the industry

Hardware manufacturers

As we’ve mentioned before, console makers can move their focus away from trying to one-up their last console’s hardware. The same goes for manufacturers of gaming PCs and laptops.
With a decreased reliance on hardware, hardware manufacturers have an opportunity to sell their products cheaper. Cheaper products like consoles would be more appealing to a wider group of consumers. In particular, consumers who have never owned gaming devices or do not own the latest products. The barrier to market for new and returning gamers could potentially be much lower.
Even companies that are not traditional hardware manufacturers have been interested in cloud gaming. Early in February, we reported that Google was rumoured to be creating a cloud gaming console.

Game developers

Game developers will be able to focus more on creating and maintaining their games if they can easily host content on the cloud.
In addition, games don’t need to be tied down to any particular type of hardware. For example, high-end games have always been the domain of PC gaming. But, cloud gaming and cloud processing mean that you could potentially play a high-end game on something like a mobile phone. Game developers wouldn’t need to create console-only, PC-only or mobile-only games. Cloud technologies would help deliver peoples’ games to any platform or any hardware.
Another advantage you might not think of immediately is games advertising/marketing. Gaikai (now owned by Sony) is one example of a company who has explored advertising. For example, they have the ability to embed game demos directly into websites. These game demos didn’t require downloads, plug-ins and so on.

Players and gamers

For any gamer, cloud gaming means convenience. Cloud gaming makes games even more accessible.
As we mentioned earlier, decreased pricing on hardware would also be attractive to gamers, especially first-timers. Additionally, you won’t need to be a hardware expert when buying or building a PC. Cloud gaming removes the knowledge barrier to high-end gaming.
Of course, the storage advantages are a boon for gamers. For example, there would be no need to worry about terabyte-sized games taking up space on your computer. We previously mentioned the need for less storage on consoles (and mobile phones too).
Related to the topic of remote storage is play-anywhere options for gamers. Instead of hosting save files locally on your computer where you can’t access them anywhere but that computer, you could potentially start a game on your TV, hop on a train and continue playing it on your phone and then sometime later keep on gaming on a laptop later that day. All of this without having to download the game to any of your devices meaning almost instantaneous gameplay.


Instead of fighting in the console wars, Microsoft can focus on reaching the widest gaming audience possible. Microsoft can also focus on reaching a wider mobile audience because cloud gaming means they can reach people across a variety of platforms.
Microsoft’s ability to interconnect players among various platforms also gives it the advantage over other gaming companies that don’t have cloud capabilities yet.

We’re going to need better internet though

It’s hard not to see cloud gaming as the big step in gaming’s history. Unfortunately, our internet infrastructures and capabilities will need to evolve. As you may have read earlier, Australia is behind even nearby neighbours in internet quality. But, if we can somehow match up our broadband speeds with our 4G speeds, we’ll be making a good step towards an innovative future.