This would allow for truly cross-platform gaming that would be less dependent on tying you into one particular hardware ecosystem, but instead rely on streaming games to a wide variety of devices as long as you have a fast and stable internet connection. Project xCloud is an ambitious project that could see Xbox Games streamed to consoles, PCs, Macs, and smartphones.
Combine this with the fact that Microsoft is bringing Xbox Live to Android, iOS and the Nintendo Switch, you can see that the company is going all-in with this gaming as a service approach.
So, what would Project xCloud on a Nintendo Switch look like? Well, given the portable console's relatively meager NVIDIA Tegra ARM processor, there's no way in heck that you'd be able to natively play a graphically-intensive game like Halo 5: Guardians. However, Project xCloud would use Microsoft servers to handle the bulk of the processing off-site allowing you to stream gameplay from that same game over the internet.
All of this would be accomplished through an all-you-can-eat buffet of gaming titles that would be available through the Netflix-esque Xbox Game Pass service. Currently, Xbox Game Pass has been limited to the Xbox One since it launched, but Microsoft is looking to expand its reach to the expansive Windows 10 PC platform. Opening up availability to the millions of Nintendo Switch devices out in the wild not only gives Microsoft another source or services revenue (which is a growing business segment for the company), but it also gives Switch gamers access to a more "mature" library of games that is vastly different from your typical Nintendo-produced blockbuster titles starring popular characters like Mario or Link.
The merger of Xbox Game Pass and Project xCloud means that games would no longer need to directly downloaded to your console, which opens up the service to more than just competing consoles like the Nintendo Switch... but also potentially TVs or streaming dongles. Could we ever get to the point with such a Microsoft gaming service would be so ubiquitous that it would be an app that comes preinstalled on your new Smart TV or Roku device? That remains to be seen, especially considering that a number of players are looking at entering the game streaming market including Amazon and Google.
This wouldn't be the first time that Nintendo and Microsoft have paired up, but this would definitely be their most ambitious pairing ever.