Microsoft's Cloud Gaming Aspirations Revealed In Internal Email Leak

Internal emails from the FTC v. Microsoft Corp MSFT case revealed Microsoft planned to stream PC games over the cloud.

While Xbox Cloud Gaming currently streams Xbox titles, Microsoft aimed to use its Azure servers to enable the streaming of native PC games, The Verge reported.

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Microsoft CEO Satya Nadella discussed this in a July 2021 email with Xbox chief Phil Spencer, expressing concern about Alphabet Inc GOOGGOOGL-owned Google's Stadia potential advantage in cloud gaming.

"Seems like they will have a leg up because their stuff is more generic Linux VMs + Network... But I am assuming we will do the same for Game Pass PC — right?," Nadella wrote.

Spencer responded, confirming Microsoft's efforts to create an Azure solution for streaming PC games and mentioning the possibility of offering a white-label cloud gaming service.

"Google has the ability to reuse their Linux cloud hardware and yes as we stream PC native games from an Azure GPU SKU we would have more re-use scenarios to recoup costs," Spencer wrote.

Microsoft was actively working on this project in July 2021.

Although there were delays and changes in Microsoft's cloud gaming plans over the past year, hints about bringing PC games to Xbox Cloud Gaming emerged, including a partnership with British mobile network EE.

Microsoft also began testing mouse and keyboard support for Xbox Cloud Gaming, but initially only for Xbox console games.

In the same email chain, Spencer shared his thoughts on Google Stadia, speculating that Google might shift Stadia towards a Google Cloud service and abandon its first-party consumer gaming service.

"Google is a massive and aggressive competitor but honestly I’ve been surprised by their lack of progress with Stadia. To date, our #1 competitor here is really nVidia with GeForce Now. But we keep our eye on both Google and Amazon.com, Inc. AMZN with Luna (also struggling)," Xbox's head added.

In the end, Google did announce the shutdown of Stadia in January 2023, nearly a year after Spencer's email.

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Photo: Diego Thomazini on Shutterstock