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Microsoft Xbox Console

Microsoft is releasing an Xbox application for smart TVs that will allow customers to stream Xbox games even if they don’t own a console.

On Thursday, Microsoft announced that the app would first be available on Samsung’s 2022 smart TVs before expanding to other manufacturers. Microsoft is taking a risk after a 92 percent increase in Xbox hardware revenue last year. The app will be available in 27 countries starting 30th June, said the company.

The move implies that Microsoft is focusing on generating revenue from gaming content and services rather than just consoles, which is currently behind Nintendo and Sony. Microsoft made the greatest gaming splash earlier this year when it revealed plans to purchase game publisher Activision Blizzard for 68.7 billion USD.

Microsoft in Gaming

Microsoft’s fourth-largest major product category is gaming. The company is hoping to attract more consumers to its 10 USD-per-month Game Pass subscription service, which includes a PC-based alternative and cloud-based streaming.

After Microsoft debuted their Xbox Series X and S consoles in 2020, and people spent more time playing games as companies and schools were shut due to the Covid pandemic, the hardware business took off. However, component shortages and, more lately, Chinese lockdowns have hampered Microsoft’s ability to assemble new consoles.

On a conference call with analysts in April, Microsoft CEO Satya Nadella said, “We have grabbed share worldwide for two quarters in a row, and we are the market leader this quarter among next-gen consoles in the US, Canada, the UK, and Western Europe.”

However, the outlook isn’t as bright as it appears. According to Ampere Analysis, a London-based research firm, Microsoft sold 7.7 million Xbox Series S and X consoles in 2021, Sony sold 12.5 million PlayStation 5 systems, and Nintendo sold 24.3 million Switch devices.

Gamers can use both Sony’s Bluetooth-connected DualSense controllers and Microsoft’s wireless Xbox controllers to play the Xbox app.

A Lure for Mobile Gamers

Microsoft is going where gamers are engaging by allowing off-console gaming. That includes appealing to smartphones running on Apple or Google operating systems. Over 25 million Game Pass subscribers’ devices can stream games via Microsoft’s data centers.

Microsoft announced that its Xbox division was working on cloud gaming streaming devices a year ago. The company will not require gamers to attach special equipment to Samsung televisions to stream games using the Xbox app.

“We have decided to pivot away from the present generation of a streaming gadget codenamed Keystone. We will take what we have learned and refocus our efforts on a new strategy that will allow us to bring Xbox Cloud Gaming to more people worldwide in the future,” said a Microsoft spokesperson to CNBC in an email.

The data from Informa Tech’s technology research subsidiary Omdia, Samsung, is leading the smart TV market with over 21.3 percent share.

The Thriving Gaming Industry

Nintendo, Sony, and Microsoft have faced component shortages for the previous two years.

Furthermore, Sony is said to be selling its PS5 console at a loss due to rising manufacturing costs. However, game demand continues to be at all-time highs, and console sales haven’t been able to keep up.

As a result, businesses will move away from consoles and try to reach customers where they are. The vast mobile gaming business, anticipated to generate 125 billion USD in revenue this year, requires cloud services.

With AR glasses on the horizon, gaming may become more cloud-based and less grounded.