Xbox's Streaming Service xCloud Shown In Action -- 8 Xbox Ones In One Rack

Microsoft is launching its new game-streaming service, currently codenamed xCloud, in public trials this October. The company has now shown off more of how it works and talked about the service at a high level. xCloud, or whatever name Microsoft ends up giving it, allows you to stream high-end games to your phone or presumably a variety of other internet-connected devices.

The games themselves run from datacenters that Microsoft operates around the world. In a new Fortune video, Xbox streaming boss Kareem Choudhry showed off the actual guts of the server rack that powers xCloud games. The core innards of eight Xbox One S consoles are fit into a 2U rack unit that was specifically designed for a data center.

The racks are physically located in 13 regions around the world, Choudhry said. You can see it for yourself in the video below, beginning at around 1:45.

It's not the flashiest of reveals, but it's neat to see the guts of how something as broad and ambitious and technically demanding as xCloud operates in a way you can see with your eyes.

Also in the video, Xbox boss Phil Spencer talks about how Microsoft does not expect cloud gaming to really take off anytime soon. Instead, the version of xCloud launching this year in public trials is seemingly being positioned as a foundation on which to build the program over the years. Spencer specifically said the groundwork being laid today will support xCloud for a decade to come.

He also talked about Microsoft's ambition for game-streaming to reach more people around the world over time than traditional gaming has been able to thus far. The thinking is that by removing the need to buy a console, Microsoft can reach a much larger population of gamers. As Microsoft has said time and again, consoles aren't big-time money-makers--it's software and services that bring home the bacon. With xCloud, seemingly every phone in the world is a potential Xbox Live subscriber, and that could become an incredibly lucrative opportunity for Microsoft if it pans out.

That being said, Microsoft continues to develop traditional consoles and it will for a long time to come. Microsoft's efforts into streaming are meant to complement the traditional console-based experience, not replace it. For Microsoft, it is all about giving people an option of how they want to play. Microsoft's next home console, Project Scarlett, launches in Holiday 2020.

xCloud's public trial launch in October is just ahead of when Google's own streaming service, Stadia, is pegged to debut in November.