Microsoft figures have privately blamed the recent Xbox Cloud Gaming restrictions on the AI boom, according to a new report from a well-known insider. The resulting claims shed light on Xbox's place in Microsoft's H2 2026 priorities, while also identifying the exact threshold where the service formerly known as xCloud supposedly starts losing money.
The report does not necessarily mean Microsoft is replacing Xbox cloud hardware with AI servers. Corden said the servers can run AI workloads off-peak but are not optimized for them, pointing instead to the opportunity cost of using data center capacity for gaming as AI demand surges. Microsoft’s latest earnings support that view: Azure demand still exceeds supply despite 31 new data centers and another gigawatt of capacity added in fiscal Q4, when capital expenditures hit $41 billion. The pressure comes as cloud gaming usage rose 45% year-over-year in December 2025 and Microsoft expanded support for streaming games users already own.
That effort follows a difficult FY2026, when Microsoft’s gaming revenue fell $1.7 billion, or 7%, including a 5% decline in content and services and a 29% hardware drop. Sharma nevertheless says Xbox expects to return to growth by the end of FY2027. Microsoft has also left room for further cloud gaming changes and has yet to announce several key details concerning the controversial November 2026 overhaul, top-up pricing being chief among them.
سەرچاوەی فەرمی بە زمانی ئینگلیزی: https://gamerant.com/xbox-cloud-streaming-restrictions-controversy-ai-effect-losing-money/
