Microsoft Teases Starting Their Own Streaming Service Within 3 Years That Doesn’t Need A Console

Xbox One S

Microsoft is teasing the idea of shifting their Xbox hardware business to more of a focus on software and even introduce their own streaming service. The announcement was made by Microsoft’s head of gaming Phil Spencer in an interview with Bloomberg. Spencer hinted that Microsoft “will probably debut a streaming service that doesn’t require a console for some types of content in the next three years.”

“We need to grow, and I look forward to doing that,” Spencer said. “Our ability to go create content has to be one of our strengths. We haven’t always invested at the same level. We’ve gone through ups and downs in the investment.”

Microsoft plans to increase investment in developing their own video games by starting their own studio or acquiring one. This is a far cry from Microsoft’s earlier company philosophy where they shuttered studios. Some of Microsoft’s most popular Xbox games have been self-published titles such as Halo and Gears of War franchises. Microsoft could have a built-in catalog for their streaming service by offering their own Xbox games and they could be played on other devices other than an Xbox. Microsoft would greatly expand on their current “Xbox Play Anywhere” feature that allows certain games to be played between Xbox and Windows 10 PCs.

“Now, players are playing the games across every device and we’re connecting those players across all of those devices,” said Spencer. “Obviously for us, the console is an important part there… but connecting to gamers wherever they are is the vision of Microsoft around what we’re doing in gaming.”

This comes at a time when Microsoft rolled out their new Xbox One X, the company’s most powerful gaming console to date. Despite the new versions of the Xbox One, Microsoft has been trailing Sony’s PlayStation 4 sales. Microsoft has sold about half as many Xbox Ones compared to PS4s. However, Microsoft has found revenue in alternative sources such as the Xbox Game Pass, which may have spurred the company to go in a different direction other than hardware.

Receiving a steady monthly or yearly subscription fee from their already massive base sounds like it would be more reliable than console sales. Plus streaming a game over an internet connection allows Microsoft to collect all of the profits instead of having a middleman selling their physical games on discs. A cloud-based gaming service makes complete sense for Microsoft, which already offers services from the cloud such as Office 365.