The FTC v. Microsoft hearing that’s still ongoing in the US is turning out to be a great source of information about how Microsoft’s gaming division operates. Yesterday, CVP of Xbox Sarah Bond was one of Microsoft’s gaming execs to testify, and she revealed that Xbox Cloud Gaming isn’t the killer feature of Microsoft’s Xbox Game Pass Ultimate subscription.

“What we’ve found is that it’s really being used by our players as a feature for the console,” Bond said (via IGN). “Because what people can do is when you go in to start playing a game, instead of waiting to download it, you can start playing it right away while it’s downloading in the background, and that’s actually the majority of the usage of xCloud gaming today, is it’s just a console feature.”

As you may recall, Microsoft originally announced Xbox Cloud Gaming (Project xCloud) back in 2018, and the cloud gaming service launched in public beta on Android in the fall of 2019. At the time, Microsoft said that Xbox Cloud Gaming was “an important step in our journey to delight the 2 billion gamers in the world.”

Fast forward to 2023, it turns out that almost no one is using Xbox Cloud Gaming on mobile devices, with the core user base being on Xbox consoles, according to Microsoft. Xbox’s Sarah Bond also said that service was running at a loss, and she also admitted that Microsoft has given up on offering Xbox Cloud Gaming via a standalone subscription (via The Verge).

“We’ve continued to get more data about the success and the popularity of xCloud. We’ve gotten more clear on the costs related to it, and we have signed partnerships with others who provide those services,” Bond said yesterday.

If the US FTC does have concerns about the impact of Microsoft’s Activision Blizzard deal on the cloud gaming market, the UK’s CMA chose to block the deal despite Microsoft offering 10-year cloud licensing deals to competitors in that space.

The FTC v. Microsoft hearing isn’t over yet and we’re likely going to get more insights on Xbox Cloud Gaming and the rest of Microsoft’s Xbox business today. Anyway, it’s quite ironic to see Microsoft dismissing the importance of Xbox Cloud Gaming, even though the original vision for it was very ambitious (remember, Microsoft aimed to reach 2 billion gamers).

As Sarah Bond admitted yesterday, “The games that are being streamed are games built for the console, but they’re being streamed to a different device, so it’s not always the best player experience.” If you ever tried to use Xbox Cloud Gaming on a mobile device, you probably already know that the UI of Xbox games doesn’t really scale well on small smartphone screens.