Microsoft now sees Amazon and Google as its main gaming threats

The coming launch of Sony's PlayStation 5 and Microsoft's Xbox Series X later this year (along with the continued success of the Nintendo Switch) point to a pretty familiar battle brewing in the ever-cyclical console wars. But Microsoft President of Gaming Phil Spencer said in a recent interview with tech site Protocol that the gaming giant is more focused on cloud-based threats than any specific console maker in the coming years.

"When you talk about Nintendo and Sony, we have a ton of respect for them, but we see Amazon and Google as the main competitors going forward," Spencer told the site. "That's not to disrespect Nintendo and Sony, but the traditional gaming companies are somewhat out of position. I guess they could try to re-create Azure, but we've invested tens of billions of dollars in cloud over the years."

The bit about trying to "re-create Azure" seems like an especially odd boast considering that Sony purchased cloud gaming service Gaikai in 2012 has been streaming games through its PlayStation Now service since 2014. Sony also recently partnered with Microsoft to now use Azure data centers to power PlayStation Now streaming, which would seem to obviate their need to "re-create" anything.

Amazon also seems like an odd potential gaming competitor—the company's own game-development efforts have been stuttering at best, and long-standing reports of plans for an Amazon game streaming service have yet to bear public fruit. Perhaps Nvidia and its newly launched GeForce Go streaming service could serve as a more appropriate threat for Spencer to cite.

Still, Spencer's main point seems to be that the battle for the "next generation" of gaming attention could be largely hardware agnostic. "I don't want to be in a fight over format wars with those guys [Sony and Nintendo] while Amazon and Google are focusing on how to get gaming to 7 billion people around the world," he said. "Ultimately, that's the goal."

A changing focus?

In a sense, this kind of statement isn't much of a surprise from Microsoft. The company was the first major console maker to tear down the "walled garden" approach to its online game service back in 2016, shaming Sony into following suit years later. And Spencer has been saying since 2015 that being the leader in console hardware sales is less important to Microsoft than making a profit with happy customers (a somewhat convenient stance given Sony's wide lead on this metric of late).

Still, citing cloud-based threats from Amazon and Google as Microsoft's main gaming competition is a major turn for the company. Despite Microsoft rolling out recent widescale tests of its own Project Xcloud streaming service in recent months, Spencer said in August that he thought such streaming was "years and years" away from being truly mainstream. For now, Microsoft has been positioning Xcloud as more of an add-on service to sweeten its popular Game Pass subscriptions. And while reports persist of a "low-cost" streaming-focused Xbox in the offing, Microsoft's public gaming hardware plans are still focused on the more traditional Series X.

Immediate plans aside, though, Spencer's comments suggest Microsoft, like Sony and Ubisoft before it, now sees cloud-based streaming as an increasingly key part of gaming's near future. We'll see if that belief pays off or if Microsoft just has its head in the clouds.