[UPDATE]

We received word from Microsoft that clarification is in order for the story originally broken by Stevivor. Here's what a spokesperson told us:

Microsoft’s Cloud Gaming Launches Today with 150+ Titles Streamable to Android

We’re very early in the multi-year journey for Project xCloud, which is currently in public preview. We are investigating a variety of new capabilities made possible by the cloud. However, we remain committed to an approach with game streaming that is complementary to console and have no plans for cloud-exclusive content at this time.

[ORIGINAL STORY]

Project xCloud is getting exclusive games. Microsoft's Corporate VP Kareem Choudry confirmed as much in an interview with Stevivor at X019.

In terms of [Project xCloud] exclusives, we’re in early talks with first- and third- parties, but we don’t have any announcements to share. New content and IP takes eighteen months to two years to develop. The first thing that we’re doing is… just lifting and shifting content that doesn’t require any development changes into the cloud. So right away [with xCloud] we’ve got a platform that can run any of the 3000 games you can run on Xbox today.

This is an interesting turn of events as Microsoft had given no indication of such plans before. The potential of entirely cloud-based games is great, particularly with regards to elastic compute, as reported before in relation to Google Stadia.

While we wait for concrete details on Project xCloud exclusives, Microsoft's Kareem Choudry said a new 'cloud-aware' functionality was recently added to the xCloud SDK.

So that the game knows at runtime [if it is] being streamed or not, [enabling developers] to make any changes that they want, specific to streaming — things like changing the font sizes or… changing some of their networking code to account for the fact that the server is in a data center.

Choudry also revealed that Project xCloud is eventually going to get upgraded with Project Scarlett hardware. We had assumed as much, of course, though it'll be interesting to see whether the Xbox One X step will be skipped or not, as the current xCloud servers are running Xbox One S hardware.

We designed [Project] Scarlett with the cloud in mind as well, and just as you’re going to see our console product family evolve with that next generation, the cloud is going to evolve along with it.

The ongoing xCloud beta preview program will be extended to Western Europe, Canada, India, and Japan in 2020. The library of compatible games also just got a lot larger.