Microsoft’s Xbox CEO, Asha Sharma speaks at the Bloomberg Tech conference in San Francisco on June 4, 2026.
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Amazon again Microsoft they have created new ways to enable people to play video games in the cloud.
Microsoft’s Xbox division said Thursday it will test an ad-supported way to let people stream video games.
Amazonon the other hand, it announced plans to add the Luna cloud gaming service to its Prime Video streaming platform. Amazon includes Prime Video with a Prime subscription, which costs $14.99 per month. Amazon’s fix will give Luna top and center promotion on its website. Previously, Luna was only accessible through a dedicated website.
The two companies have been successful in cloud computing but have stumbled as they try to get people into games with sometimes unreliable internet connections, which can lead to delays.
“Our mission is simple. Give more people affordable ways to play,” Xbox wrote in a blog post.
Microsoft began selling its first Xbox console in 2001. Today, Xbox leads Nintendo again Sony in console sales. The subsidiary is trying to return to growth and expand margins after spending $75.4 billion on Call of Duty publisher Activision Blizzard in 2023.
Since Meta Executive Asha Sharma replaced Phil Spencer in February as Xbox CEO, has appointed new leaders, promoted the upcoming console, pushed exclusive games and lowered subscription prices. This month, he announced a 20% reduction in capacity and said that Xbox will outsource four development studios.
Xbox has pursued marketing in the past, and customers have always been fans. In 2024, one person complained about McDonald’s an ad from the game selection screen. Publishers Electronic Arts again Take-Two Interactive they have experimented with ads and quickly backtracked in response to criticism.
“Advertising has existed in sports for decades, from game placement to free-to-play models,” Xbox said in a post. “But it wasn’t always built with the player in mind. If done right, advertising can help lower the cost of access.”
Gamers participating in the Xbox Insider program can join the test with a one-hour session limit. It works on games that are already in the user’s library.
Xbox hasn’t pulled the plug on a part of its Game Pass subscription service that contains advertising, but consumers have shown interest in such revenue. NetflixThe ad-supported service category has taken tens of millions of users, CNBC reported in 2024.
Amazon entered the cloud gaming market during the Covid crisis, as gaming became more popular, with people spending more time at home. The digital commerce company started with Luna in 2020, three years after Microsoft introduced Game Pass, and one year after arguing with the cloud. Google unveiled its own cloud streaming option, Stadia.
Google stopped working on Stadia in 2023. With Luna, users can play on smartphones and regular computers without having to buy dedicated gaming consoles or PCs.
By integrating Luna into Prime Video, the digital marketing company is doubling down on its push to attract casual gamers with party games and popular intellectual properties like “Harry Potter” and “Tomb Raider.” The head of Amazon games, Jeff Gattis, told CNBC in an interview that the company does not intend to attract serious gamers or compete with console makers.
The unit, which Amazon recently restructured to combine Luna with its game studios, struggled to produce big hits, struggled with profits and was laid off several times. Amazon has recently closed or withdrawn several of its titles, including its online multiplayer games “New World” and the planned “Lord of the Rings” project.
Luna has “millions” of users across the US and 13 other countries, with the goal of reaching 10 to 20 million “very soon,” Gattis said.
In a market where PlayStation, Xbox, Epic Games and Steam are “fighting it out,” Gattis said gamers are “well-served, if overlooked.” He said there is a strong segment of consumers who want to play games but don’t want to invest in expensive hardware and software.
Amazon is working to address the awareness gap among consumers who may not know or understand its gaming strategy, Gattis said.
“I always say that people don’t have to like our strategy or agree with it, but it is important,” he said. “Hopefully, they understand.”
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