Microsoft: internet bandwidth issues make cloud gaming a "challenge"

But cloud distribution of all content will happen eventually.

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Cloud gaming is one of the industry's hottest topics, but for Microsoft, it'll be a long time before it realises its potential.

Microsoft Studios boss Phil Spencer told news.com "bandwidth issues" were holding cloud gaming back, but agreed with the likes of Gaikai and OnLive on one thing: that, eventually, everything will be delivered digitally.

"Cloud is a huge opportunity," he said. "And someday, yes, someday. But if you look at the internet capabilities today, it's a challenge. Even, forget about games. If you said everybody was going to watch the Champions League Final concurrently via the internet at HD-level quality, the internet can't handle that. And that's just people watching a game. That doesn't include the level of interactivity of a game and a two-way pipe going back and forth.

"So there's just bandwidth issues in terms of metering and things that are out there. So I believe, yes, in the long run we'll land in a spot where there's cloud distribution of all content and Microsoft is clearly invested in that. I like the work that Gaikai does, I play games on Gaikai, and if I get the right bandwidth situation they're actually good experiences.

"But today it's not really up to scale. You're still going to be pushing boxes out to people's houses that they're going to plug into the TV. That's what they're going to use to play their AAA games. And I think that'll be the case for a while. But that's not trying to downplay what Gaikai is doing, because I think that it's great that they're investing in it."

Many predict that Microsoft and Sony will include cloud gaming features in their next generation home consoles, rumoured to be due out late next year.

In the run up to E3 Sony was rumoured to have signed a deal with Gaikai to enable the streaming of PS2 and PS1 games through the PlayStation 3 and maybe PS Vita - although Gaikai chief David Perry denied this when quizzed by Eurogamer.

And last month the Wall Street Journal reported that Sony considered making the PlayStation 4 digital only before deciding to include an optical drive because of internet speeds.

Spencer indicated that Microsoft will include a drive in the next Xbox, saying retail still plays an important role in the sale of video games.

"I would say, and not just for PR reasons, that retail is very important to us," he said. "Retail distribution of games is going to be very important for years. When you go to a Midwest town, there are still people where retail is still the way they buy, even music. There are millions of people who still buy DVDs. And they're going to buy [retail] games and they're going to buy consoles."

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