Xbox Insiders can stream owned games like Forza Horizon 6 and free-to-play titles free for one-hour sessions after watching up to two minutes of preroll ads; ads do not interrupt gameplay.
Amazon adds a Games tab to Prime Video, folding Luna into the app for all Prime subscribers; gaming head Jeff Gattis says the company targets casual players, not console competitors.
Both companies admit cloud gaming has not met expectations; Xbox CEO Asha Sharma cut prices, announced a 2027 console, and laid off 20% of the division this month.
Xbox console prices will increase by up to $100 on 1 August, days after the ad test launch, while Game Pass subscriptions range from $9.99 to $22.99 per month.
On 23 July 2026, Microsoft began a limited test letting Xbox Insiders stream select games they own without a Game Pass subscription, funded by advertising. Participants watch up to two minutes of preroll ads before each one-hour session; ads do not interrupt gameplay. After the hour, they can watch another ad block to continue. The test includes titles like Forza Horizon 6, 007 First Light, and free-to-play games such as Call of Duty: Warzone and Genshin Impact. Xbox says the trial is voluntary and available across supported devices: consoles, TVs, VR headsets, PCs, tablets and mobile. The company previously tested an ad-supported version internally late last year.
“Advertising has existed in gaming for decades, from in-game placements to free-to-play models. But it hasn't always been built with the player in mind. When done well, advertising can help lower the cost of access.”
The company outlined five principles for its advertising programme, promising ads will match the quality of its content and fit each platform. The test does not yet signal a permanent free tier, but Xbox said it will learn from player feedback.
The same day, Amazon announced it is folding its Luna cloud gaming service into the Prime Video app, adding a "Games" tab alongside Movies, TV Shows and Sports for all Prime subscribers. The move targets casual players who might try a game like Harry Potter or Tomb Raider without buying a console. Amazon's head of gaming Jeff Gattis told CNBC the company is not trying to compete with PlayStation, Xbox or Steam.
“Gamers are well-served, if not overserved.”
Luna had "millions" of users across 14 countries but suffered from low awareness. By placing it inside Prime Video, Amazon hopes to reach the large existing Prime audience. The strategy echoes Google's failed Stadia, which shut down in 2023 after betting on casual cloud gamers.
Both announcements amount to an admission that cloud gaming has not grown as fast as the industry expected. Xbox CEO Asha Sharma, who replaced Phil Spencer in February, has cut subscription prices, announced a next-generation console for 2027, and this month laid off 20% of the division's workforce. Game Pass sits at around 30 million subscribers, with many users leaving, according to The Wall Street Journal. The fundamental obstacle remains latency: streaming interactive content over inconsistent internet connections cannot match local hardware.
Xbox's ad-supported test borrows from Netflix's ad tier, which attracted tens of millions of users by lowering the price barrier, and from Nvidia's GeForce Now, which offers a free one-hour tier. Yet the risk is that ads in gaming trigger the same backlash that forced EA and Take-Two to remove in-game advertising years ago.
The test runs for a limited time and is only open to Xbox Insiders, a programme anyone 18 or older can join by downloading the Xbox Insider Hub app. Xbox has not confirmed whether it will launch a permanent ad-supported tier, but the company stressed affordability as a goal. It also noted that cloud streaming can help Xbox One owners play newer Series X/S titles without buying new hardware.
“Cloud can also help Xbox One owners play newer games built for Xbox Series X|S without needing to purchase new hardware right away.”
Meanwhile, Xbox console prices are set to rise by up to $100 on 1 August, just days after the ad test began.
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Microsoft's Xbox Insiders can stream owned titles like Forza Horizon 6 free for one-hour sessions after watching ads, while Amazon puts Luna inside Prime Video to reach casual players.
AI text based on reports by Gizmodo, The Next Web, engadget and other publishers. Published .