Hitechreports

It’s been a big week in Xbox news. Following Microsoft’s controversial announcement of a 50% price hike for Game Pass Ultimate, the company may already be preparing a counter-move to soften the blow: a free, ad-supported version of Xbox Cloud Gaming.

According to a report from The Verge, Microsoft is internally testing a limited, ad-backed tier of its cloud gaming service, which officially exited beta this week. Employees testing the service can stream select owned titles, classic Xbox retro games, and rotating “Free Play Days” content—typically offered as weekend trials—without needing a Game Pass subscription.

The trade-off, however, is clear. Players may need to sit through several minutes of ads before diving into a game, and playtime is restricted. Early testing suggests a one-hour session limit, up to five times per month, though these rules could shift by launch.

When is it releasing?

The new tier is expected to roll out across PC, Xbox consoles, handheld devices, and web browsers; however, Microsoft hasn’t confirmed the supported streaming quality. The company recently unlocked 1440p streaming for Game Pass Ultimate, but free users will likely be capped at 1080p or lower, with “best quality” options reserved for paid subscribers.

Currently, all three Game Pass tiers include unlimited cloud gaming, though wait times increase with cheaper plans. Any free-tier user will almost certainly face the longest queues, though Microsoft may hope that the mandatory ads will mask the delays.

Microsoft’s ad-supported version of Xbox Cloud Gaming has been in development for some time. Nearly two years ago, Microsoft Gaming CFO Tim Stuart first hinted at the possibility of a free cloud gaming option. More recently, the company has reinforced its commitment to making the service more widely available.

“We see this as a chance to make Xbox Cloud Gaming far more affordable and accessible to players,” said Jason Ronald, Microsoft’s VP of Next Generation, during an Xbox podcast in August. “That could mean expanding into new regions or introducing new ways for players to access the cloud.”

If launched, the ad-supported tier would mark a significant shift in Microsoft’s cloud gaming strategy, offering a no-cost entry point while potentially driving players toward premium Game Pass plans.