Microsoft is building a "Netflix for games" right now, and it's called Project xCloud.
- Microsoft is building a service that intends to be the "Netflix for games."
- The goal of the service, named "Project xCloud," is to stream high-end video games to any device.
- "We have as much a shot to build a subscription service as anybody else," Microsoft CEO Satya Nadella said on Monday at an invitational editors' meeting at Microsoft's headquarters.
SEATTLE — "We describe it as, shorthand, 'Netflix for games,'" Microsoft CEO Satya Nadella told journalists at an invitational editors' meeting at Microsoft's headquarters on Monday.
Nadella was speaking about Microsoft's cloud ambitions outside of enterprise software — and more specifically, the company's ambitious push into video game streaming with Project xCloud.
The idea is simple: play high-quality, blockbuster games on any device.
Internally, Microsoft refers to it by the nickname "Netflix for games," Nadella said. That's what the industry generally calls this idea.
Rather than your device powering the game, a more powerful computer somewhere remote would power it — you only have to stream it to your phone, game console, laptop, or whatever other device.
Though the concept is simple, executing it is far more difficult. Video games often demand precision timing, and the kind of unpredictable latency introduced by streaming over the internet is difficult to mitigate.
Nearly every major tech company is working on a form of video game streaming technology right now.
But Nadella thinks Microsoft is in a better position to tackle the issue than the competition. "We have as much a shot to build a subscription service as anybody else," he said on Monday.
Some have been announced or are already operating, like Google's Project Stream and Sony's PlayStation Now, while others are little more than whispers at the moment, like streaming services from Verizon and Amazon.
Nadella said Microsoft had the upper hand with its Xbox gaming arm, which gives Microsoft a strategic advantage that much of the competition is lacking.
"We have a huge back catalog, which is: We have our own games," he said, referring to the Microsoft-published back catalog of games on the Xbox that includes "Halo," "Forza," and much more.
He also pointed to services like Xbox Live, which draws tens of millions of paying users monthly, and the company's ability to synergize between its Windows and Xbox businesses.
"We have a structural position in that we have both a console business as well as a PC business," he said, "which happens to be bigger than the console business when it comes to gaming."
Look no further than Microsoft's "Play Anywhere" initiative for evidence of that cooperation.
The initiative has been huge for stoking goodwill with players: You buy an "Xbox Play Anywhere" game on either Xbox or Windows 10, and you immediately own it in both places at no additional cost. Even your game-saves transfer between the two platforms.
It's part of a bigger push within Microsoft's Xbox group, led by Microsoft's vice president of gaming, Phil Spencer, to make Xbox into a platform rather than a piece of hardware.
"There are 2 billion people who play video games on the planet today. We're not going to sell 2 billion consoles," Spencer told Business Insider in an interview in June.
"Many of those people don't own a television; many have never owned a PC. For many people on the planet, the phone is their compute device," he said. "It's really about reaching a customer wherever they are, on the devices that they have."
For now, Project xCloud — the "Netflix for games" service Nadella spoke about — is still in development. Microsoft is planning to run public tests of the service in 2019.
For a closer look at the service, check out this video: