In 2016, Microsoft’s CVP of Cloud Gaming, Kareem Choudhry, who was working on backwards compatibility features at the time, thought more on the possibility of providing games without the need of a console. “We enabled people to play a game designed for the 360, without a 360,” Choudhry told GQ in a recent article. So how do we take that to the next step? I started asking the question of, ‘What does it mean to play a console game without a console?’” Choudhry then went to Xbox chief Phil Spencer and asked for a team to investigate the idea further. In 2018, Microsoft saw the potential and officially created an Xbox cloud team and labelled the project, Project xCloud.
It’s unclear when Microsoft started dabbling with cloud technology to specifically stream games, but reports seem to suggest it was sometime in the early-to-mid 2010s. As The Verge reported back in 2013, Microsoft demonstrated a cloud gaming prototype during an internal meeting that saw the Xbox 360 title Halo 4 running on a Nokia Lumia 520 Windows Phone (RIP) and a low-end PC with the game being streamed from the cloud. In the demonstration, Microsoft showed off the prototype using the phone with an Xbox 360 controller attached using an accessory — sounds pretty familiar, right? According to the report, Microsoft had managed to reduce the latency to just 45ms, which is pretty impressive.
Phil Spencer teased the service on stage at E3 2018, saying that Microsoft’s cloud engineers were building a “game streaming network to unlock console-quality gaming on any device.” Choudhry then revealed Project xCloud in a blog post later that year, which explained how Microsoft would bring the streaming service to gamers. To enable compatibility with existing and future Xbox games, Microsoft built its own custom hardware for its datacentres. New server blades that could hold the components of multiple Xbox One S consoles were constructed and deployed into various Azure datacentres across the world. Later, Microsoft would upgrade these server blades to include custom Xbox Series X hardware, which would allow for 1080p/60fps streaming.