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Xbox has been on the again foot in some methods within the wider video games business, however cloud gaming is arguably not certainly one of them.
Xbox Series X|S gross sales have not set the world on hearth. Complications from tariffs, the rise of easy-access “everywhere” free PC / cellular video games like Roblox and Fortnite, and competitors from different informal types of leisure like TikTok proceed to hinder conventional gaming firms. Nintendo’s inventory is down 30% over the previous six months as DRAM worth hikes spook buyers, and PlayStation has additionally seen {hardware} declines this 12 months as nicely.
Last week, users began to spot that while launching games on Xbox Cloud Gaming, a new message pops up. “1 hour of ad supported play time per session.”
Some began wondering if this meant that all tiers of Xbox Cloud Gaming are slated to receive ads, but our sources suggest this message is in error.
As I reported last year, Microsoft has been exploring ads for Xbox Cloud Gaming, and while seeking clarification about this message, it was confirmed to me that the ads will appear separately on Xbox Cloud Gaming, for those who have purchased Xbox games digitally, but don’t have Xbox Game Pass. Microsoft has hundreds of games available to buy via Xbox Cloud Gaming, but as of writing, you need at least one tier of Xbox Game Pass to access them. This session-based ad-supported access tier will change that.
Xbox Cloud Gaming has been something of a hot topic as of late, given that AI demand is blowing up prices of components traditionally used in local gaming hardware, such as DRAM, and even SSDs and other parts. Many manufacturers have been increasing prices of components and pre-built gaming devices too, such as the PS5, Xbox Series X|S, and the Nintendo Switch.
looks like ad-supported Xbox Cloud Gaming is coming soon 👀 pic.twitter.com/c8hAERrVB9January 17, 2026
Cloud streaming companies like Xbox Cloud Gaming and NVIDIA GeForce Now have been eyed as a possible panacea for customers priced out of native {hardware} — however it’s not as if these companies are insulated from worth will increase too. Cloud gaming prices cash to maintain and run as nicely, and makes use of the entire similar components and elements. However, in periods of low use, compute from cloud gaming servers will also be tailored for different makes use of, reminiscent of AI and different enterprise grade processes.
The worst factor on the earth of cloud economics is idle compute. If your servers are sitting there doing nothing, you are losing cash — so opening up Azure to free Xbox Cloud Gaming companies, delivered through advertisements and the like, is probably one other approach of insuring Azure inference stays excessive and constant. It helps justify additional information heart enlargement, and in addition anchors Xbox’s future in a universe the place cloud and AI is dominating Microsoft’s pondering.
It stays to be seen precisely when it will roll out, however I’m informed it is coming “this year.”
Xbox Cloud Gaming has seen double digit progress for Microsoft, and has been notably robust in areas the place tariffs, taxes, and different financial elements make conventional gaming {hardware} purchases prohibitively costly. Microsoft expanded Xbox Cloud Gaming to India late final 12 months, and has its eyes on different areas in each Asia and Africa for the tech. On the excessive finish, Xbox Game Pass Ultimate members can now stream some video games with boosted bitrates, at 1440p decision.
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