Xbox testing ad-supported streaming, Amazon brings Luna to Prime Video

Amazon and Microsoft have devised new ways to get people playing video games in the cloud.

Microsoft’s Xbox division said Thursday that it will test an advertising-supported way of letting people stream video games.

Amazon, meanwhile, announced plans to add the Luna cloud gaming service to its Prime Video streaming platform. Amazon includes Prime Video in Prime subscriptions, which cost $14.99 per month. Amazon’s adjustment will give Luna more front-and-center promotion on its website. Previously, Luna was only accessible through a dedicated website.

The two companies have succeeded in cloud computing but have stumbled as they have tried to get people hooked on games over sometimes unreliable internet connections, which can result in latency.

“Our goal is simple. Give more people more affordable ways to play,” Xbox wrote in a blog post.

Microsoft started selling its inaugural Xbox console in 2001. Today, Xbox trails Nintendo and Sony in console sales. The subsidiary is trying to return to growth and widen 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, she has appointed new leaders, touted a forthcoming console, pushed for exclusive games and dropped subscription prices. This month, she announced a 20% reduction in force and said Xbox will spin out four development studios.

Xbox has pursued advertising in the past, and customers haven’t always been fans. In 2024, some players complained about a McDonald’s ad appearing on a screen for selecting games. Publishers Electronic Arts and Take-Two Interactive have experimented with ads and quickly backpedaled in response to criticism.

“Advertising has existed in gaming for decades, from in-game placements to free-to-play models,” Xbox said in the post. “But it hasn’t always been built with the player in mind. When done well, 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 applies to games that are already in a user’s library.

Xbox has not created a tier of its Game Pass subscription service that contains advertising, but consumers have shown interest in such offerings. Netflix‘s ad-supported service tier has picked up tens of millions of users, CNBC reported in 2024.

Amazon entered the cloud gaming market during the Covid pandemic, as gaming was gaining popularity with people spending more time at home. The digital commerce company debuted Luna in 2020, three years after Microsoft had introduced Game Pass, and one year after cloud challenger Google revealed its own cloud streaming option, Stadia.

Google discontinued Stadia in 2023. With Luna, users can play on smartphones and standard computers without purchasing consoles or dedicated gaming…