Our Pay-to-Play Cloud Gaming Future

A few weeks back, Microsoft announced upcoming changes to Xbox Cloud Gaming. Basically, they will be limiting cloud gaming via Game Pass from unlimited streaming to a fixed number of hours per month based on the tier you are subscribed to.

This got me nostalgic for all the wrong reasons. It made me harken back to the good old days of cellular phone plans. The days when using your phone could cause you to accumulate a massive bill thanks to overages (arguably, we are still there, but that’s outside the scope of this article). 

See, our phone plans used to provide us with a set number of minutes. Once you used up those minutes, you went onto a pay-per-use overage rate set by the carrier. And to reduce the financial risk, you were offered an additional bucket of minutes for a set price. Sound familiar?

This was a huge money-making machine for wireless carriers. Eventually, unlimited calling became a thing, although that didn't necessarily mean everyone was getting more value from their plan.

Before going any further, let’s take a step back to remind you folks where this is going and how we got here.

Gaming was, and still is, one of the last entertainment medium not to be bound by a subscription. Sure, we have PS Plus, Xbox Game Pass and Nintendo Switch Online, but those services remain optional. You can still buy a game and enjoy it without buying into a subscription. You put the game in your console, and voilà, you’re playing your game.

And today, due to the A.I. data centre build-out push, component parts for PCs and consoles are now more expensive, with the massive demand for A.I. infrastructure putting additional pressure on the supply of memory and other components. 

Component costs have also become a problem for the industry, with Microsoft openly acknowledging that rising hardware costs are forcing it to rethink how it approaches its next generation of hardware. Since components have gone up in price, we’ve seen consoles increase in price and become harder to find.

With both the Xbox Series X/S and the PlayStation 5 nearly six years old, we’ve also seen sales of these machines peak and demand lower substantially (which has changed slightly recently with the advent of Grand Theft Auto VI). To get a stagnated market moving again, both companies started talking about a new console generation.

But wait, won’t these consoles be expensive, you ask? Of course they will, which is why Xbox chief executive Asha Sharma recently told the BBC that Microsoft needs to think about affordability and rethink the traditional industry mindset of selling each new machine as something faster and more powerful than the previous one. Instead, it appears the question is becoming, “How much gaming can we deliver for the money?”

For Xbox, that means that if a gamer can’t afford or can’t find the latest console, they have cloud gaming options available to them. Xbox is also testing a disc-to-digital initiative that allows owners of supported Xbox One and Series X disc-based games to claim digital versions of those games. Where supported, those digital entitlements can also be used with Xbox Cloud Gaming.

That means if you have an original Xbox One, you may be able to take a supported game you already own on disc, claim the digital entitlement and play it via the cloud on your aging yet still functional hardware. Forward-thinking in an age of e-waste? Not so fast! Over the years, like it or not, we have been conditioned to stream games. You can now play Game Pass on a variety of TVs, and every device is effectively a cloud Xbox now (I apologize for the reminder).

Even PlayStation has its own dedicated handheld remote-play device in the PlayStation Portal. Originally launched as a remote-play device, PlayStation Plus Premium subscribers can now, according to PlayStation, discover the “freedom of cloud streaming.” PlayStation has also expanded cloud streaming to include select PS5 games that users own. 

I wouldn't be surprised if, in a few months from now, they enable the ability to stream something like GTA VI and push it as an option for those itching to play but can’t find or afford the traditional hardware to play it on. I bet GeForce NOW and Game Pass (or whatever cloud initiative they end up launching) will be doing so as well.

See where I’m going with this? The perfect time and place to monetize gaming subscriptions for good, and monetize it they will.

From what we’ve been reading, it appears that cloud streaming may be decoupled from the services we’re paying for and offered as additional usage buckets (à la cellphone plans). Once you’ve used up your allotted time, you’ll hopefully be given the opportunity to purchase additional buckets (as suggested by the rumours), instead of going onto the pay-per-use money-printing meter.

And like your cellphone provider, once the market has plateaued, they will offer us the almighty unlimited streaming bundle for much more than we are used to paying. 

Investors will be happy, gamers will continue marching on with their $199 to $250 cloud machine, and everyone is happy owning nothing (again!).