Sega was revealed last month to be working on a cloud-based platform called Fog Gaming that by design was not exactly cloud-based in the traditional sense.
What the publisher proposed was to repurpose arcade machines as makeshift data centers that would serve as a technical backbone for the Fog Gaming network. While setting up actual data centers would usually carry a steep cost, arcade machines are these days equipped with high-performance hardware that Sega can utilize for a comparatively cheap cloud-based solution.
There are two facts here that explain why an idea like Fog Gaming came to only the Sonic owner. Sega Corporation is firstly based in Japan, a country widely known for a rich arcade culture. Sega, secondly, directly operates and is affiliated with more than 200 arcade centers if not more that are spread out across Japan, all of which were upgraded only last year with a high-speed internet connection of an effective transmission bandwidth of 800 Mbps.
Further factoring in how the relatively populated locations of Japan are already beaming with arcade centers, Fog Gaming can connect all of those arcade centers to reduce the physical distance between online players and potentially provide latencies as low as 1 ms for online gaming in a region-wide grid.
The end goal though goes much further. Sega wants to bring in game publishers and companies (along with investment) to not only work with Fog Gaming but to also help the network grow. The publisher also wants the repurposed arcade machines to be used for businesses, computations, rendering, and just about anything that cloud-based solutions usually provide.
The invitation from Sega to all industry behemoths birthed a rather unusual rumor that Microsoft could possibly be working with the publisher. Microsoft has been pushing hard for cloud-based functionalities with Azure and Project xCloud. The belief that the Xbox company could piggyback Fog Gaming to expand cloud coverage was, however, ill conceived. There are several reasons why.
Fog Gaming is and will always be limited to a country like Japan because of how the network works. Japan is also where Microsoft has always done poorly with the Xbox family of consoles. The notion that Microsoft can kill two birds with one stone by using an existing platform like Fog Gaming to establish cloud and brand dominance in Japan will never happen.
Fog Gaming, for the most part, is yet to be deployed and stress-tested. Microsoft would never experiment on such large scale when the company already has a giant like Azure or even Project xCloud for that matter. Microsoft also has deep enough pockets to force cloud-based gaming or any other usage all across Japan if the company thought it was beneficial. Hence, again, relying on something like Fog Gaming would be unheard of and frankly, improbable for a company like Microsoft.
Microsoft also has no need to partner with Sega for Xbox Series X or the rumored Xbox Series S for that matter. Fog Gaming may have its advantages but Microsoft already has a next-generation plan in motion.
Phil Spencer, head of the Xbox brand, has stated that “there is no Plan B” where Microsoft does a limited launch in different regions. He has also admitted that delaying Xbox One in Japan was a mistake and not something Microsoft will repeat again. Hence, all efforts are being made to make Xbox Series X available worldwide during the holiday season at the end of the year.
Fog Gaming can never stand up to Microsoft Azure and Project xCloud. Hence, relinquish the thought that Microsoft needs something like Fog Gaming to jumpstart itself in the Japanese market.