When I take the Xbox gamepad to start playing Halo: Master Chief Collection, I say something I’ve said approximately 17,000 times in my life: “Let me just invert the Y-axis.” I always think of the right thumbstick, which controls the game view, like a pilot's yoke, so when I want to look down, I push the thumbstick up.

Some people...don't agree. “Interview over,” Kareem Choudhry says, laughing.

Choudhry’s colleague, Kevin La Chapelle, jumps in to defend me. “I’ve found another one!” he says gleefully. “We’re unicorns.” Even inside the Studio D building on Microsoft’s campus, home of all things Xbox, the thumbstick-preference wars rage on.

Not that fixing the controller layout makes me any better at the game; trying to drive a Warthog, I crash the all-terrain vehicle into a tree. Repeatedly. It’s not my fault, though—I’m just not used to playing Halo on a phone.

Yes, on a phone.

Nearly a year ago, Microsoft executives acknowledged that the company was actively pursuing a cloud gaming service that would allow users to play Xbox games without an actual console. It wasn’t the only company racing toward the technology; everyone from chipmaker Nvidia to game publisher Electronic Arts to Sony’s PlayStation division has been working on the ability to stream games directly to customers. No downloads, no storage, no brawny processor requirements. Cloud gaming could untether games from the hardware we use to run them, and in doing so untether people from needing to buy ever-stronger, ever-pricer machines.

Now, on an ironically cloudless early October day, I'm visiting those same Microsoft execs at their headquarters in Redmond, Washington, to see the progress they’ve made. That progress includes a lot of caveats, and more than a little secrecy—but it also makes clear that Microsoft is aiming higher, and achieving more, than what some have thought.

Project xCloud, as the effort is known internally, is a company-wide push that leverages the expertise of a multitude of different teams. It tapped the secretive Microsoft Research division, which works on everything from quantum computing to AR/VR to genomics, to crack thresholds that probably wouldn’t have been cracked otherwise. It harnesses the power and ubiquity of Microsoft’s globe-spanning network of Azure data centers. And perhaps more importantly, it turns the living-room console—an immovable fixture of game culture since 1972—from an anchor into a hub.

According to market intelligence firm NewZoo, the games industry is set to bring in $138 billion in revenue this year, from 2.3 billion players—and for the first time, more than half of that money is coming from mobile games. Fortnite alone, which is available on mobile as well as consoles and PCs, has made publisher Epic Games more than $1 billion. Console gaming may represent the second-strongest sector in the industry, but it’s still missing out on a lot of those 2.3 billion players. We’ve gotten used to playing games anywhere we have a screen; Microsoft wants to make sure all those games are Xbox’s.

Finding Gamers Where They Are

Phil Spencer has been head of Xbox for years. If you play games, you know his face and voice well—he’s the guy who gets onstage at E3 or Gamescom, invariably in a t-shirt and sneakers, to pump the newest games and features coming to the Xbox One or its predecessor, the Xbox 360. Last year, though, Spencer’s role changed; Microsoft CEO Satya Nadella added him to the company’s Senior Leadership Team, a group of 15 executives that meets weekly with Nadella. That came with a new title, “executive vice president of gaming,” but it also signaled a shift inside Microsoft, and inside Nadella’s head: gaming mattered. A lot.

By this summer, that signal became a shout. Over a span from April through June, Xbox revenue was up 35 percent over the previous year. And on a conference call with investors, Nadella explicitly said what Xbox owners hadn’t heard in a long time: the company was all-in on gaming. “We're pursuing our expansive opportunity from the way games are created and distributed, to how they're played and viewed,” Nadella said. “We're investing aggressively in content, community, and cloud services across every end-point to expand usage and deepen engagement with gamers.”