It seems Microsoft sacrificed Xbox Series X sales to build Xbox Cloud Gaming servers

It seems Microsoft sacrificed Xbox Series X sales to build Xbox Cloud Gaming servers

What you need to know

  • Microsoft is battling the FTC in court over its acquisition of Activision-Blizzard-King (ABK) for Xbox. 
  • ABK would give it control of Call of Duty, something Xbox’s main competitor, PlayStation is heavily lobbying against. 
  • As part of the proceedings, a mountain of documents exposing Xbox practices has been unearthed. 
  • Within, it was seemingly confirmed that the reason Xbox Series X|S consoles are in such short supply is the bet Microsoft made on Xbox Cloud Gaming. 
  • Xbox Cloud Gaming servers use Xbox Series X chipsets to run, reducing the amount of consoles available to purchase at home. 

The Xbox vs. FTC court case rolls on, and lots of potentially embarrassing secrets are emerging about big ol’ Microsoft. This latest one is quite a doozy, though. 

Microsoft is attempting to acquire Activision-Blizzard-King for $69 billion dollars. The acquisition would give it control of Call of Duty, World of Warcraft, and Candy Crush, giving it a huge amount of leverage over Google and Apple’s mobile dominance in the process. Microsoft has been aggressively exploring ways it can grow Xbox beyond the console under your TV, seeking to gain a foothold in Windows PC gaming as well as on mobile devices, via the cloud. Xbox Cloud Gaming is a decent attempt by Microsoft to bring console-quality titles to tablets and phones, but the technology is fraught with issues from high-latency gameplay, to text scaling too small to read on handheld devices. Regardless, the pursuit of cloud was something Microsoft very clearly believed in, in documents recently shared by the FTC court hearing (via The Verge). 

(Image credit: Microsoft)

In the document, Xbox lead Phil Spencer discusses issues with Xbox Series X|S console supply. The Xbox Series X in particular has notoriously been unavailable to purchase across the world, while PlayStation 5 surged ahead in demand. I’d always suspected that allocating chip supplies to Xbox Cloud Gaming was the culprit, and now we have some evidence.

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