Microsoft Launches Ad-Supported Xbox Cloud Gaming Service

REDMOND, Wash. — Microsoft has begun internal testing of an ad-supported Xbox Cloud Gaming service, marking a new strategy in its gaming division. The initiative started on October 3, 2025, with an anticipated public beta rollout in the coming months.

The new service will allow users to stream selected games without needing a Game Pass subscription. Advertisements will run as two-minute pre-rolls before gameplay, with currently defined session limits of one hour and a cap of five free hours per month. However, the company may alter these parameters prior to the public launch.

This service will provide access to personal games, Free Play Days titles, and retro classics. It is designed to function across multiple platforms, including PCs, Xbox consoles, and handheld devices, aiming to broaden the reach of Xbox gaming.

Microsoft’s adjustments come alongside a major price hike, with Game Pass Ultimate subscribers facing a 50 percent increase. The changes reflect an ongoing effort to enhance the service after its beta completion, aiming for better streaming quality with improved resolution options and bitrates for paying subscribers.

Jason Ronald, Microsoft’s VP of next generation, emphasized that the initiative aims to make gaming more accessible and affordable. ‘We want to open up new regions and ways to access Xbox cloud,’ he said during an Xbox podcast.

Concerns have emerged as testers reported the potential drawbacks of advertisements and session limits. An article cited a user’s frustration: ‘Imagine being in a game when a two-minute ad pops up—it’s disruptive.’ The new approach mirrors trends in the gaming industry as 80 percent of U.S. internet users identify as gamers.

Despite its potential for widening accessibility, observers remain skeptical about user experience. Microsoft must balance ad loads and session constraints to ensure positive adoption rates. Testing feedback from employees will shape the final product before its upcoming public release.