• Microsoft said its Xbox Cloud Gaming service will arrive on console this holiday.
• Cloud gaming lets people stream games over the internet rather than install them locally.
• Xbox Cloud Gaming is currently only available on mobile devices and PCs.

Microsoft is bringing its cloud gaming service to Xbox consoles later this year.

The company announced Tuesday that Xbox Cloud Gaming, which lets players stream games rather than having to install them onto a device, would arrive on its new Xbox Series X and Xbox Series S consoles as well as older Xbox One machines this holiday.

American tech giants like Microsoft, Google and Amazon are betting on a future of video games beyond consoles, where subscription services and software will play a much greater role.

Though Microsoft is still investing heavily in Xbox hardware, it's also putting a great deal of focus into Xbox Game Pass, a subscription service that gives players access to a library of over 100 titles for about $15 a month.

Cloud gaming, where games are hosted on remote servers and streamed to users over the internet, is a big part of Microsoft's strategy. The aim is to attract gamers to the Microsoft ecosystem through a range of different devices.

Currently, Xbox Cloud Gaming is only available on mobile devices and PCs. Now, Microsoft plans to bring it to consoles. It also has a plan to launch cloud gaming on TVs through partnerships with manufacturers and its own dedicated streaming dongles.

Microsoft unveiled the release window for cloud gaming on consoles at the Gamescom video game trade fair. The event normally takes place in Cologne, Germany but has gone online-only this year due to the coronavirus pandemic.

Japanese rival Sony is also betting on services through its PlayStation Plus subscription offering, which gives gamers access to online multiplayer and select free games every month.

But the company is mainly touting its blockbuster exclusive games in a bid to lure consumers. Hit franchises like The Last of Us and God of War, for example, can only be found on PlayStation platforms.

Microsoft has been spending more aggressively on exclusive content lately, however. The firm last year acquired Bethesda, the iconic video game publisher behind franchises like The Elder Scrolls and Fallout, for $7.5 billion.

Video games had a boom year in 2020, as people turned to home entertainment during Covid lockdowns. It's now an $180 billion industry, according to market researchers IDC. As various countries unwind their pandemic restrictions, it remains to be seen whether the momentum can continue.