Microsoft is bringing Xbox Game Pass cloud streaming to smart TVs

Microsoft is releasing an Xbox app for smart TVs that will allow consumers to stream Xbox video games even if they don’t own consoles.

Microsoft said Thursday that it will first bring the app to Samsung’s smart TVs for 2022 and then expand distribution to other manufacturers. It’s a bold bet for Microsoft after Xbox hardware revenue grew 92% over the past year. The company said the app will be available in 27 countries from June 30.

The move shows Microsoft’s focus on generating revenue from gaming content and services, as opposed to just consoles, where the company lags behind Nintendo and Sony. Microsoft’s biggest breakthrough in gaming came earlier this year when the company announced plans to buy games publisher Activision Blizzard for $68.7 billion.

Gaming is Microsoft’s fourth-largest core product category, and the company is aiming to lure more users to its Game Pass subscription service, which costs $10 a month and includes an option for people who play on PCs and stream via the cloud.

The hardware business picked up steam in 2020 after Microsoft released its Xbox Series X and S consoles and people spent more time gaming while offices and schools were closed due to the Covid pandemic. But component supply shortages and, more recently, lockdowns in China have impacted Microsoft’s ability to produce new consoles.

“We’ve acquired shares globally for two straight quarters and are the market leader in next-gen consoles in the United States, Canada, the United Kingdom and Western Europe this quarter,” Microsoft CEO Satya Nadella told analysts on an April conference call.

But the overall picture is not so rosy. London-based researcher Ampere Analysis estimated that Microsoft sold 7.7 million Xbox Series S and X consoles in 2021, while Sony sold 12.5 million PlayStation 5 systems and Nintendo 24.3 million Switches.

Gamers can play the Xbox app with Sony’s Bluetooth-connected DualSense controllers, as well as Microsoft’s wireless Xbox controllers.

With the game opening up from the console, Microsoft is going where gamers play. That means addressing mobile devices with operating systems from Apple or Google. Over 25 million Game Pass subscribers can stream games from Microsoft’s data centers to these devices.

A year ago, Microsoft said its Xbox division was developing streaming devices for cloud gaming. The company will not require gamers to connect special devices to Samsung TVs in order to stream games through the Xbox app.

“We have made the decision to move away from the current iteration of a streaming device codenamed Keystone,” a Microsoft spokesperson told CNBC in an email. “We will leverage what we have learned and focus our efforts on a new approach that will allow us to bring Xbox Cloud Gaming to more gamers around the world in the future.”

Samsung leads the smart TV market with a 21.3% share, according to data from Omdia, Informa Tech’s technology research subsidiary.

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