It's become very clear over the past year that major tech companies believe cloud-based gaming experiences are the future of the gaming market. Microsoft initially announced xCloud back in 2018 and the service entered a limited public preview last year, and Google went all out with its Stadia launch. Just this week, Nvidia launched its GeForce Now service, shedding the beta tag it had been carrying for the past few months.
Cloud gaming is still in its early stages, and being that the market has usually revolved around the three major console manufacturers - Microsoft, Sony, and Nintendo - there are still a lot of questions as to how the market will evolve in the next couple of years. However, Phil Spencer, head of the Xbox division at Microsoft, is very confident that the core gaming market is now in the cloud and not on consoles, so much so that it doesn't consider Sony and Nintendo as its primary rivals going forward.
As part of a larger article on the state of gaming and how tech companies perceive it, Protocol spoke to Phil Spencer (via OnMSFT), who made clear that it's focused on Google and Amazon as rivals:
"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."
Spencer's statement does make sense, since neither Sony or Nintendo have made cloud gaming their primary focus in past years. However, Sony has offered PlayStation Now for a few years, and just last year, it entered a partnership with Microsoft to adopt Azure as the backbone for its cloud experiences. The biggest limitation with PlayStation Now at the moment is that it's only available for PC, but it's not hard to imagine it could be brought over to mobile devices. And while Nintendo hasn't made any visible investments in that regard, there's no reason why it couldn't rely on someone else's cloud infrastructure, too.
It's still early for judgments to be made on which companies will or won't thrive in the gaming market going forward, but it's no surprise that changes will be happening. Nvidia and Google are already in the fight for a piece of the market, and Amazon is expected to do the same soon. As part of the same Protocol article, analyst Michael Pachter says the e-commerce and cloud giant should have its own streaming service this year, most likely before the next-generation consoles from Microsoft and Sony are released.
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