Microsoft Tests Ad-Supported Cloud Gaming for Owned Games

Microsoft Tests Ad-Supported Xbox Cloud Gaming Tier

Microsoft has initiated a test of an ad-supported tier for its Xbox Cloud Gaming service, allowing users to stream select games from their digital libraries without an active Game Pass subscription. The test is currently available to members of the Xbox Insider program on Xbox consoles, Windows 10, and Windows 11 PCs.

The ad-supported streaming option is limited to games the user already owns. Streaming sessions are capped at one hour.

According to Microsoft, advertisements play before a game session begins and do not appear during gameplay.

Internal testing parameters included approximately two minutes of pre-roll advertisements and allowed up to five free hours of play per month. Users with a paid cloud gaming subscription can skip the advertisements.

Currently, access to cloud streaming for owned Xbox games requires an Xbox Game Pass subscription. The ad-supported tier is expected to change this by providing session-based access without requiring a subscription.

Microsoft has described the test as an effort to expand affordable options for playing Xbox games.

"Our overall goal is simple: to give players more affordable options to play [and] see how players use ad-supported streaming and listen to their feedback." — Matthew Ball, Xbox's Chief Strategy Officer

In a separate announcement, Microsoft noted: "We’ll learn from this test and continue to improve it based on how players use it and what they tell us."

Microsoft has indicated that the ad-supported service is part of a broader strategy to utilize idle compute resources within its Azure cloud infrastructure. By integrating ad-supported services, the company aims to maintain high and consistent Azure inference, which supports further data center expansion. Cloud gaming servers can be adapted for other uses, such as AI and enterprise processes, during periods of low gaming demand.

Traditional gaming hardware sales, including Xbox Series X|S, PlayStation, and Nintendo Switch, have faced challenges due to factors such as tariffs, rising component prices, and competition from PC and mobile gaming.

Cloud streaming services, including Xbox Cloud Gaming and NVIDIA GeForce Now, are being considered as alternative options for consumers affected by increasing hardware costs. Xbox has recently undergone layoffs, studio closures, and price increases on consoles by up to $100, effective August 1.

Xbox Cloud Gaming has demonstrated double-digit growth, particularly in regions where economic factors make traditional gaming hardware more expensive. Microsoft expanded the service to India in the past year and is targeting further expansion into other regions across Asia and Africa. High-end features, such as 1440p resolution streaming with boosted bitrates, are available to Xbox Game Pass Ultimate members.

Ad-supported tiers have become common on video streaming platforms. NVIDIA's GeForce Now currently offers a free ad-supported option for its cloud gaming service.

Microsoft confirmed its testing of the ad-supported service following weeks of earlier reports. Public testing, beginning with Xbox Insiders, is expected to occur within the current year. The rollout of the ad-supported Xbox Cloud Gaming tier is anticipated to occur within the current year.