Microsoft is working on an online streaming video service that is Netflix-like for video games. It promises to deliver 'console-quality gameplay to any device'.
The Redmond-based company claims that gamers will be able to stream blockbuster films to their Xbox, laptop or mobile.
It is not clear if players will need to pay for individual games or the possibility of having access the entire library for a monthly charge for services like video on-demand.
Microsoft believes that streaming will replace dedicated consoles entirely Microsoft is also hinting that new Xbox hardware is already in development.
Microsoft is creating an online video game streaming service that will bring console-quality gaming to all devices. Microsoft also revealed 50 new games for gamers during its E3 presentation, which is a new record for the Redmond-based firm.
Xbox boss Phil Spencer also teased the coming streaming video games service, which Spencer claims will be able to 'unlock console-quality gaming on any device'
Microsoft's Executive Vice President of Gaming Phil Spencer spoke at the E3 press conference in Los Angeles to reveal its plans to build a cloud-based service.
Spencer said: 'Our cloud engineers are creating a gaming streaming network that will unlock console-quality gaming on any device.
"We are determined to improve your experience wherever you play on your Xbox or PC and your phone."
Cloud Gaming is a way players can have access to a huge library of games without needing to download or install every one.
Cloud gaming lets console-quality games to run on less powerful devices such as smartphones. All the heavy lifting is performed on a server and not on the device used by the player.
This is very different from traditional video console games, that have to process all data on the disc locally and therefore require powerful chipsets and fan systems.
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Spencer, Xbox boss, did not announce the date of the launch of the service on stage. However Spencer has previously suggested that Microsoft's game streaming service could be available before 2020.
The company isn't the only one to have shown an interest in a service that streams games and its rival PlayStation already offering gamers the option of streaming games to their devices.
It's dubbed PlayStation Now, the subscription service costs PS12.99 ($20) per month. minecraft servers lets users stream more than 500 titles on their Sony PS4 or Windows PC.
Sony launched its cloud gaming service following it bought rival services Gaikai and OnLive.
Microsoft has not given up on its hardware plans, despite its focus on streaming videogames.
It is not clear if users will need to pay for individual titles or the possibility of being able to access the entire library for a single monthly charge, similar to Netflix.
Microsoft has announced plans to develop Xbox hardware with new consoles planned, despite teaser of a streaming service.
Xbox boss Phil Spencer remained tight-lipped on any specifics about the forthcoming console, however, the executive did reveal that backwards-compatibility with older video games would play significant role for the new hardware
Phil Spencer used the E3 keynote to reveal the follow-up to the Xbox One, with hints that Microsoft might have multiple new consoles in the works.
He also said that the same team that delivered unparalleled performance with Xbox One X was deep into designing the next Xbox consoles. This will allow them to be able to fulfill their commitment to console gaming.
Spencer remained tight-lipped on any specifics about the console, however, the executive did reveal that backwards-compatibility with Xbox One games would play significant role for the new hardware.
Eurogamer was told by him: "When you think about the next wave of hardware, many of the massive, big games currently played will still exist when the next hardware comes out."
It's unlikely that you'll see a "2" after all those, as people are trying to take you to the next version of these games. In the old days of games shipping - getting played and then moving away switching consoles was an easy step-function.
"We tried it with Minecraft. We didn't launch Minecraft 2 on Xbox One to force everyone to upgrade to the next console. That's not what Minecraft users would like to see. They want Minecraft to improve.
When you think about games like PUBG and Fortnite and you think about these large games and ecosystems that will be available, once new hardware arrives, people will still be interested in playing these games, and it's going to be essential for us as platforms to support them.'
Microsoft announced a new game in its wildly popular Halo series named Halo Infinite, which will be exclusive to Xbox consoles
Microsoft also showed an unprecedented number of brand new games to its fans during its E3 presentation.
The company took the wraps off a variety of exclusive titles, including the latest entries in its Halo and Gears of War series.
Spencer described the company's "most diverse gaming portfolio" as the newest list of games.