Microsoft appears poised to introduce a free, advertising-supported tier for its Xbox Cloud Gaming service, with testing potentially beginning for Xbox Insiders in the near future, according to sources speaking to The Verge.
Although the company has previously said it is considering an ad-based cloud gaming model, it has offered few concrete details. Recently, a new loading screen in the Xbox app suggested users can play one-hour sessions that include advertisements.
This matches earlier October reports suggesting Microsoft planned to offer five free hours of cloud gaming per month, although the exact terms remain subject to change during testing.
After The Verge published its report, Microsoft issued a brief statement to The New York Times, confirming it is “testing an ad-supported model for cloud gaming” but offering no additional details. Separate reporting citing internal documents suggests non-subscribers would be required to view roughly two minutes of ads before starting a session. The free tier is also expected to feature a limited catalog, potentially including retro games, Free Play Days titles, and select games already owned by users.
The move would bring Xbox Cloud Gaming into more direct competition with NVIDIA’s GeForce Now free tier, which similarly imposes a one-hour session limit and places ads within its access queue. One difference is that GeForce Now lets users stream games they already own across multiple digital storefronts. A free-tier revival would come three years after the shutdown of Google Stadia, which pursued a comparable approach. Reports indicate that Microsoft began internal discussions around ad-supported cloud gaming around the time Stadia closed.
Industry observers say Microsoft may unveil the new tier during its Developer_Direct presentation scheduled for Thursday, January 22. The event is also expected to feature updates on titles including Forza Horizon 6 and the upcoming Fable.
The push into cloud gaming lines up with Microsoft’s gradual move away from relying solely on console sales. Xbox hardware has posted back-to-back quarterly declines, even as the company leans into a more platform-neutral strategy. This year, franchises long associated with Xbox, like Forza Horizon 6, will arrive on both the PlayStation 5 and Xbox Series. A next-generation Xbox is still in the works, but reports say it may blur the line between a console and a PC.
A free, ad-supported cloud tier would help Microsoft reduce its reliance on console sales and reach more players through service-based access.
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