Game File published an excellent interview with Phil Spencer (Xbox lead at Microsoft) yesterday. It covered the future of the Xbox business, digital distribution and more!
One of the topics that came up is Cloud Gaming which has seen big growth! According to Phil, it now represents a double digit share of Xbox playtime.
Cloud adoption and expansion had been slow, but is finally picking up. Gaming via the cloud now accounts for a double-digit percentage of total hours of Xbox games played. There was a time when we weren’t deploying more blades because we had more supply than we did demand for the server racks that we had in place. That’s clearly not true today.
Phil Spencer to Game File
Phil also mentions that they are beginning to find new Xbox users because of Xbox Cloud Gaming.
Any conversation we have on cloud is very time-dependent because it’s growing so fast. Xbox cloud gaming growth in the last six months (is) in markets that are never going to be console markets – (it) has been spreading across (Smart) TVs, Chromebooks and Android tablets.
Phil Spencer to Game File
It is clear that the Xbox ecosystem now spans well beyond just the plastic box. PC Game Pass has been a growth area for the platform and now Xbox Cloud Gaming is really picking up steam as well. As Xbox invests in more server capacity in more places, we should expect even more growth. And, Xbox is available via NVIDIA’s GeForce NOW as well!
10% is absolutely huge for cloud gaming! We just recently estimated that NVIDIA’s GFN represents less than 1% of Steam usage.
We also expect Xbox Cloud Gaming to arrive on even more devices in the future – on more Smart TV OSes in particular. This will essentially make every TV an Xbox. In addition, Phil has confirmed that the ability to play Xbox titles you purchase outright is still on the way! It’s clear that cloud gaming is going to be a big growth area for the ecosystem.
Going Digital Only?
So, Xbox is clearly leaning in on cloud gaming. But, does this mean they are going all-digital? Phil said they definitely see a lot more digital sales than physical these days (and already have an all digital console), but going all-digital isn’t part of their strategy.
I will say our strategy does not hinge on people moving all-digital. And getting rid of physical, that’s not a strategic thing for us.
Phil to Game File
So, you likely have at least a generation left with a physical option (though it could be based on an add-on external drive accessory)
