Cloud gaming could be the next console war. As a new era of game streaming services dawns, Phil Spencer sees tech giants that are now entering the industry as the major threat to his company moving forward

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Xbox Phil Spencer Sees Amazon, Google As Main Competitors

Phil Spencer, head of Xbox at Microsoft, highlighted which companies he sees as his major competition in the gaming space as the industry heads into a new decade. Over the past year, tech giants such as Apple and Google have gotten into gaming in a big way, with the former launching the subscription mobile games service Apple Arcade in September and the latter debuting its Stadia games streaming service in November. Amazon, meanwhile, has long been rumored to be working on a service of its own, but details are still being kept under lock and key. However, Jeff Bezos’ tech and shipping superpower is planning to launch its first title under the Amazon Game Studios banner, the massively multiplayer open world game New World, this year.

In an interview with Protocol, Phil Spencer discussed his confidence with Microsoft’s place in the world of cloud gaming. He said that, looking forward, it would be Amazon and Google who were the main competition for Xbox in that area, and not traditional gaming giants like Nintendo or Sony.

“When you talk about Nintendo and Sony, we have a ton of respect for them, but we see Amazon and Google as the main competitors going forward,”

“That’s not to disrespect Nintendo and Sony, but the traditional gaming companies are somewhat out of position. I guess they could try to re-create Azure, but we’ve invested tens of billions of dollars in cloud over the years.”

The Azure that Spencer is referring to here is Microsoft’s cloud computing service. In the larger technology landscape, thousands of companies use Azure as part of their infrastructure and for their own cloud products. However, in the gaming space, Azure is the backbone for Xbox’s Project xCloud feature. Project xCloud allows players to stream Xbox games directly from the cloud onto mobile phones or tablets. Spencer seems to see this as the key to the future for company going forward, rather than the direct console competition that has happened in past generations.

“I don’t want to be in a fight over format wars with those guys while Amazon and Google are focusing on how to get gaming to seven billion people around the world. Ultimately, that’s the goal,”

Phil Spencer said.

According to Protocol, Spencer mentioned Microsoft is “willing to cooperate with Nintendo and Sony on initiatives like allowing gamers on the various companies’ systems to play with and against one another.”

As for the competition Spencer does name, Google and Amazon, both technology companies have massive cloud computing infrastructures already in place, and are in various stages of rolling out gaming components for those services.

Google’s contribution to the gaming world is Stadia, a console-free gaming program where players can stream games to any platform — phones, tablets, TV, laptops, and desktops — without installing anything. The example given when Stadia was announced was that players, while watching YouTube, could see a trailer for a game, click Play Now, and be playing it within five seconds without downloading anything, without a patch, and without even installing. Google Stadia will be compatible with mouse and keyboard and with USB controllers, but will also have its own controller. Microsoft may be more established games wise, but Google are making strides in that area too; having last year announced Stadia Games and Entertainment as their own first party games studio.

Amazon, meanwhile, are doing their bit to push their way into the market of cloud streaming, and are rumoured to be launching their own video game streaming service this year. They also have their own development company, Amazon Games Studios, which has mostly published games for mobile and the Amazon Web Store, along with The Grand Tour Game for Xbox One and PS4. They’ve also got a couple of unannounced games in development, possibly for their also unannounced streaming service.

Cloud gaming still seems like it’s in the distant future, especially as Sony and Microsoft prepare to launch the traditional PlayStation 5 and Xbox Series X consoles later this year. Both next-generation consoles will go head-to-head throughout the important holiday season, and Nintendo is still seeing positive growth with its Switch sales, thanks to the new Switch Lite.