Microsoft Xbox CEO Asha Sharma speaks at the Bloomberg Tech Conference in San Francisco on June 4, 2026.
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Amazon and microsoft They have devised a new way to get people to play video games in the cloud.
Microsoft’s Xbox division announced Thursday that it will test an ad-supported way to help people stream video games.
AmazonMeanwhile, it announced plans to add Luna cloud gaming service to its Prime Video streaming platform. Amazon’s Prime subscription includes Prime Video and costs $14.99 per month. With Amazon’s adjustments, Luna will have more prominent promotions on its website. Previously, Luna could only be accessed through a dedicated website.
Both companies have found success with cloud computing, but have stumbled trying to get people hooked on games over unreliable internet connections that can experience lag.
“Our goal is simple: give more people a more affordable way to play,” Xbox wrote in a blog post.
Microsoft began selling the original Xbox console in 2001. Right now, Xbox is lagging behind. nintendo and sony On console sales. The company is looking to return to growth and expand profit margins after spending $75.4 billion on Call of Duty publisher Activision Blizzard in 2023.
Since then meta Executive Asha Sharma replaced Phil Spencer as Xbox CEO in February, appointing a new leader, promoting upcoming consoles, pushing exclusive games and lowering subscription prices. This month, she announced 20% headcount cuts and said Xbox would spin out four development studios.
Xbox has pursued advertising in the past, but customers weren’t necessarily fans. In 2024, some players will mcdonalds Advertisements will be displayed on the game selection screen. Publisher electronic arts and take-two interactive It experimented with advertising but quickly retreated in response to criticism.
“Advertising has existed in gaming for decades, from in-game placements to free-to-play models,” Xbox said in a post. “But it’s not always built with the player in mind. Advertising, when done well, can help reduce access costs.”
Gamers who are part of the Xbox Insider Program can participate in the test with a one-hour session limit. This applies to games that are already in the user’s library.
Although Xbox has not created a tier of Game Pass subscription services that include ads, consumers have expressed interest in such services. NetflixCNBC reported in 2024 that its ad-supported service tier had gained tens of millions of users.
Amazon entered the cloud gaming market as gaming became more popular as people spent more time at home during the coronavirus pandemic. The digital commerce company debuted Luna in 2020, three years after Microsoft introduced Game Pass and a year after its cloud challenger. google has announced its own cloud streaming option, Stadia.
Google retired Stadia in 2023. Luna allows users to play on their smartphones or standard computers without purchasing a console or dedicated gaming PC.
By integrating Luna into Prime Video, the digital commerce company furthers its efforts to attract casual players with party games and well-known intellectual properties such as Harry Potter and Tomb Raider. Jeff Gattis, Amazon’s head of gaming, said in an interview with CNBC that the company isn’t trying to attract hardcore gamers or compete with console makers.
The division, which Amazon recently restructured to combine Luna and its game studios, has struggled to produce blockbusters, faced leadership changes and experienced several layoffs. Amazon has recently shut down or offloaded several titles, including the massively multiplayer online game New World and a planned Lord of the Rings project.
Luna has “millions” of users in the U.S. and 13 other countries, Gattis said, and the goal is to reach 10 million to 20 million “as soon as possible.”
In a market where PlayStation, Xbox, Epic Games and Steam are “competing against each other,” gamers are “well served, if not overserved,” Gattis said. He said there is a strong segment of consumers who want to play games but don’t want to invest in increasingly expensive hardware and software.
Gattis said Amazon is working to close the perception gap among consumers who don’t know or understand the company’s gaming strategy.
“I always say people don’t have to like our strategy or agree with it, but it’s important,” he said. “I hope they understand that.”
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