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Microsoft is planting the seeds for cloud gaming supremacy

·Technology Editor
·4 min read
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Microsoft (MSFT) rolled out a host of updates and improvements Thursday for its Xbox Cloud Gaming platform, including the ability to stream games directly to new Samsung TVs without extra hardware.

The move, which comes during the gaming industry’s annual summer announcement extravaganza, is another step in Microsoft’s ongoing effort to establish an early lead in the cloud gaming market ahead of rival’s Sony (SONY) and Nintendo (NTDOY), as well as newcomers like Amazon’s (AMZN) Luna.

“I believe that Microsoft is going to have an advantage and they're certainly investing like they have that advantage,” IDC research director for gaming and AR/VR Lewis Ward told Yahoo Finance.

Cloud gaming differs from your normal console-based gaming by allowing users to stream games over the internet to low-powered laptops and TVs like they would movies from Netflix (NFLX).

The cloud gaming industry is still in its early stages and Microsoft and its rivals face a number of hurdles before the business even comes close to supplanting traditional methods of gaming. This includes ensuring that cloud gaming is as reliable as playing on a console or PC.

Microsoft’s making it easier to get into cloud gaming

The cloud gaming industry is expected to explode throughout the 2020s. According to Ward, the total worldwide monthly active users will grow from just 48 million in 2020 to 150 million in 2025.

The broader gaming industry is still centered around playing games stored on devices, whether those are smartphones, consoles, or PCs. What’s more, cloud gaming requires a high-speed internet connection, and there are plenty of consumers in the U.S. and across the world who don’t have access to the necessary connection speeds.

Gaming giants like Microsoft and Sony, however, are hoping they can establish themselves as the leaders in cloud gaming, ensuring they capture both their current console-based users and new gamers in the future.

So far, Microsoft is winning the race, with its Game Pass Ultimate subscription.

Priced at $14.99 per month, Game Pass Ultimate lets players stream more than 100 games including brand new first-party titles to their smartphones, Xbox consoles, tablets, PCs, and even Chromebooks via their web browsers.

Sony is set to officially launch its new PlayStation Plus Premium on June 13, offering both cloud gaming and the ability to download titles. Priced at $17.99, the service will not only cost more than Microsoft’s Game Pass Ultimate, it will only let users stream games to the company’s PlayStation 4 and PlayStation 5 consoles and PCs.

Amazon’s Luna, meanwhile, is offered free for Amazon Prime subscribers with a rotating selection of games, as well as gaming channels focused on themes like party or family friendly titles you can subscribe to à la cart.

You can stream games to PC, Mac, Fire TV, and mobile devices. While the service is continually adding games, Microsoft’s potent collection of first-party titles and fan base give it a significant advantage over Luna and Sony.

Microsoft’s cloud gaming is growing and has the infrastructure to go further

It’s not just pricing and available games giving Microsoft an advantage over Sony and Amazon. Microsoft, unlike Sony, can leverage its massive cloud computing power to bring cloud gaming to users across the world. Sony, has to rely on third-party cloud capabilities to reach potential customers.

Amazon has a similar advantage as Microsoft, thanks to its Amazon Web Services cloud platform, but it doesn’t have the same level of cache in the gaming business as Microsoft or Sony.

(Source: Microsoft)
Microsoft rolled out a host of updates and improvements for its Xbox Cloud Gaming platform (Source: Microsoft)

Beyond expanding its cloud gaming service to Samsung TVs, Microsoft is growing the platform’s footprint, bringing the service to New Zealand and Argentina. On top of that, Microsoft is trying to meet gamers with consoles half way, announcing they’ll soon be able to play certain titles they’ve purchased digitally for Xbox consoles, via the cloud.

So if you bought a game for your Xbox, you’ll be able to stream it to your other devices, even if it isn’t in the current Xbox Cloud Gaming library.

To be sure, Microsoft and its rivals still have a long way to go before any of them can claim the cloud gaming crown. Cloud gaming isn’t nearly as popular as console, PC, or smartphone-based gaming. And asking consumers to throw another subscription service at their budget could prove difficult, especially as economists and Wall Street analysts are predicting a recession in the near future.

Still, over the long term, cloud gaming looks poised to become another go-to option for gamers around the world. And, for now at least, Microsoft looks dead set on being the cloud gaming king.

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Got a tip? Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.