Many companies like Amazon and Google have made a huge push into cloud gaming lately. While Microsoft may be the biggest player given Xbox Remote Play and Xbox Cloud Gaming, the company's new focus is to develop "cloud-native games". Microsoft tired to make this work with Crackdown 3, but its ambitions didn't pan out as expected a few years ago.
According to a presentation at the 2022 Game Developers Conference, Xbox is forming a new division that'll focus on cloud-native games. It's being headed by Kim Swift who's known for the Portal and Left 4 Dead franchises at Valve. She also worked at Google Stadia, but was hired by Microsoft to lead its efforts.
Cloud-native games are basically those that offload a lot of their processing to the cloud in order to increase the number of players in multiplayer matches or the complexity of the environment. It seems like we finally have the technology to make this happen in a seamless and unobtrusive way.
It'll be interesting to see what sort of games Swift's team bring to the Xbox platform. Don't expect immediate results because it seems like they're just getting off the ground. This is definitely where the future of gaming lies in order to truly push technology forward.