Microsoft is releasing an Xbox app for smart TVs, enabling 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 2022 smart TVs and then expand distribution to other manufacturers. It’s a bold bet for Microsoft, after Xbox’s hardware revenue jumped 92% last year. The company said the app will be available starting June 30, in 27 countries.
The move indicates Microsoft is focused on picking up revenue from gaming content and services, as opposed to just consoles, where the company is lagging behind Nintendo and Sony. Microsoft’s biggest splash in gaming came earlier this year, when the company announced plans to buy game publisher Activision Blizzard for $68.7 billion.
Gaming is Microsoft’s fourth-largest major 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 playing on PCs and streaming via the cloud.
The hardware business picked up steam in 2020 after Microsoft released its Xbox Series X and S consoles, and as people spent more time playing games while offices and schools were closed due to the Covid pandemic. But component supply shortages and more recently lockdowns in China have hurt Microsoft’s ability to produce new consoles.
“We have taken share globally for two quarters in a row, and we are the market leader this quarter among next-gen consoles in the United States, Canada, U.K. and Western Europe,” Microsoft CEO Satya Nadella told analysts on a conference call in April.
But the overall picture isn’t 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 sold 24.3 million Switches.
Gamers will be able to play the Xbox app with Sony’s Bluetooth-connected DualSense controllers as well as Microsoft’s wireless Xbox controllers.
In opening up gaming off the console, Microsoft is going where gamers are playing. That means catering to mobile devices running operating systems from Apple or Google. Over 25 million Game Pass subscribers can stream games from Microsoft’s data centers onto those devices.
A year ago Microsoft said the Xbox division was developing streaming devices for cloud gaming. The company won’t be requiring gamers to connect special devices to Samsung televisions to stream games through the Xbox app.
“We have made the decision to pivot away from the current iteration” of a streaming device codenamed Keystone, a Microsoft spokesperson told CNBC in an email. “We will take our learnings and refocus our efforts on a new approach that will allow us to deliver Xbox Cloud Gaming to more players around the world in the future.”
Samsung leads the smart TV market with 21.3% share, according to data from Informa Tech’s technology research subsidiary Omdia.
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