As 2020 promises to be the start of the next gaming generation with the upcoming releases of the Xbox Series X and the PlayStation 5, there are serious questions about just what video games are going to look like moving forward. For nearly 20 years, the console market has been a race between three major players: Nintendo, Sony, and Microsoft.

In a recent interview with Protocol, Phil Spencer, head of Microsoft’s gaming division, claims that the status quo has changed. In his words, “When you talk about Nintendo and Sony, we have a ton of respect for them, but we see Amazon and Google as the main competitors going forward...the traditional gaming companies are somewhat out of position.” This is a pretty big claim from Spencer, one that indicates that the order of console gaming (and the industry in general) has shifted, or at least that a shift is imminent. But is he right? Is a big change in the gaming industry on the horizon, or is this just the belief inside Microsoft? To try and understand this, let’s take a look at the current state of the industry.

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Nintendo Switch: Handheld and Console Gaming Together

Nintendo has been the odd one out in the console wars for a while now, and the Switch continues that trend. It launched in 2017, putting it in a weird spot between console generations both in terms of release date and what the console itself is capable of. From the beginning, the Switch sold itself on being a home and portable console. All of its games can be played on a TV or in handheld mode, which puts it in a completely different category than the other consoles. While Microsoft’s xCloud technology is meant to make the same type of game portability possible, it’s also not platform exclusive.

Between Nintendo's strong lineup of first-party exclusives and the Switch's lower price point, and it's evident they are not trying to compete in terms of hardware in the same way as the other players, making the competition much more about Sony vs. Microsoft.

Ninth-Generation Consoles: Playstation 5 vs. Xbox Series X

The PlayStation 5 and Xbox Series X are going to be in much closer competition with one another than either is with Nintendo. The PlayStation 4 greatly outsold the Xbox One, with estimates putting PS4 sales at about 106 million units compared to the Xbox One’s 50 million. While both were pretty successful, Sony clearly has a great advantage here.

Based on that, it would seem that Phil Spencer is wrong to say that Sony is not Microsoft's competition. Of course, such a statement assumes that console sales is Microsoft's main focus, something which may not be the case.

Related: REPORT: PlayStation 5 Price Revealed, Priced Higher Than Sony Wants

Do the Console Wars Matter?

Spencer’s quote identifies Google and Amazon as Microsoft's main competitors. Neither of them is really in the console game, but they both have business infrastructures that could be more valuable than consoles. As game streaming (both in terms of playing or watching others play online) grows, what it takes to get games to audiences changes. Games don’t just run on a box in a bedroom or living room like they used to. They run on servers that connect players all around the world, and they get streamed online for an audience.

Amazon, Google and Microsoft have all jump into this sphere. Amazon owns Twitch, which is almost synonymous with game streaming, along with Amazon Web Services, which some games use as their server backend. Google owns YouTube (home of Let’s Plays) along with the Google Cloud Platform and the currently rough Stadia service. Microsoft owns Mixer, its own streaming service, along with their cloud computing service, Azure, which games can use as their server backend.

Related: Definitive Guide to Games Streaming Platforms

Putting this together, it’s clear where Spencer thinks the future of gaming is going, and it’s not to the company that makes a box that plugs into a TV. Instead, it’s about the infrastructure that allows gamers to play and share their games with others.

The Battle of Infrastructure

Microsoft xCloud

It’s notable that Microsoft works pretty well with other console manufacturers. They were early to jump on cross-play between different consoles, especially compared to Sony’s reluctance. It’s unclear if the Xbox has ever been profitable for Microsoft, but in a way, it never has to be. It only has to support the truly profitable part of the company: Azure and other services.

Neither Sony nor Nintendo has anything quite like Microsoft’s cloud infrastructure, and Microsoft is just as willing to sell capacity on it to its supposed competitors as to any other company. What it's worried about is rivals to this side of its business. Sony and Nintendo can’t do that on their own, while other tech companies can.

While on the traditional side of things, it appears that the Console Wars between Microsoft and Sony will play out as they have for the last 20 years, that may not be the most relevant part of gaming anymore. Instead, Microsoft is betting on the winners being those who run the backend. While it'll be a long time until the infrastructure is in place for the entire industry to be online only, Microsoft and other big tech companies are betting on that being gaming's future. In that world, Nintendo and Sony aren’t Microsoft's competition, but instead partners that it can work with to fight against its actual competitors, Amazon and Google.

KEEP READING: PS5 Vs. XBOX Series X: What We Know About the Next-Gen Console Wars