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Machiavellian said:

I believe before we go into what is PR and what is true we need to understand how Azure works for dedicated servers.  First there is no setup of dedicated servers on Azure.  All Azure servers are just virtual resources that is managed by the platform.  The Servers pretty much run like MS Hyper V virtual machines that are pretty close to the mettle but still not directly tied to physical hardware.  Those servers spin up when there is a request and goes away when there are none.  There is no physical hardware that is setup to constantily host games.  At this time you pay per hour the machie is up and running and the cost can vary but its pretty low.  The cheapest model cost about 15 dollars a month to run if it ran 24 hours a day.  That should give you a kind of outlook of how cheap it would be to run dedicated servers over Azure.  Take the fact that MS is probably willing to eat some cost on this to get developers to use it for the X1 and you see that it probably isn't PR at all.

I think you're missing my point. I know how cloud computing works. But that still doesn't change the fact that his words and the headline give the impression that running dedicated game servers on the MS Azure cloud will be completely free for Xbone game developers. Which is nonsense imo. Microsoft will offer game developers very affordable prices, which I think makes perfect sense, but there will still be costs the developers have to pay, at least in some cases.

Well, they might actually make it completely free and completely cross-finance it with XBL revenues, but I consider that rather unlikely.