Insider claims “compute demands for AI” led to the gutting of Xbox Cloud Streaming

Late last week, Microsoft made headlines when they announced that come this November, the console maker’s heavily-promoted Xbox Cloud Streaming service would be drastically changed, no longer offering unlimited streaming hours – with even top tier Ultimate subscribers only being offered 15 hours of use a month. Seeing as how we are in the year 2026, there could only be one primary reason for this change, with insiders revealing that “compute demands for AI” is what ultimately led to this decision.

As part of the initial blog post detailing the upcoming changes to Xbox Cloud Streaming, Microsoft claimed to be:

“Introducing this model because the cost of providing cloud gaming grows as more people use it and play for longer. Moving to monthly limits allows us to keep offering the service while continuing to invest in its reliability and performance.”

For many, it was clear as to why this decision had been made. Saying the quiet part out loud however, known Microsoft insider Jez Corden took to Windows Central to state:

“I was recently told by Microsoft figures that, given compute demands for AI, Xbox Cloud Gaming is effectively losing money when used beyond 15 hours per month. When you have Azure server rack space being used for anything other than AI, it seems Microsoft isn't particularly sentimental towards the idea anymore.”

Of course, the irony isn’t lost on us, with many of the issues which Xbox is currently facing (streaming costs, component prices and more) coming as a result of Microsoft’s own AI ambitions outside of Xbox. Either way, it is safe to assume that moving forward Xbox Cloud Streaming is no longer one of the core pillars of Game Pass.

KitGuru says: What do you think of this recent change? Is cloud streaming a viable option, or is the tech still too premature? Let us know down below.

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