Windows 8 cloud gaming service Agawi’s promising future on the Xbox 720

Agawi, a small cloud gaming service, is strengthening its presence on Windows 8, the operating system that will power the Xbox 720.

Cloud-based streaming video game services will define the next round of video game consoles. OnLive may have failed, but that doesn’t mean the business isn’t heating up. Sony acquired Gaikai in July, and CEO Kaz Hirai is already talking about cloud gaming’s place in the future of the PlayStation brand. Square-Enix has its own browser-based service called Core Online. Cable companies like Time Warner and Comcast, meanwhile, are turning to cloud gaming as a way to compete with consoles. The field is filling up. What about Microsoft?

Agawi could be the streaming video game service of choice for the Xbox 720.

The cloud gaming company, whose name is an acronym for “any game anywhere instantly,” is actively looking to partner with browser-based MMO and social game developers to push games on Windows 8 in time for its launch later this month. It’s actually already partnered with Microsoft, using the Windows Azure cloud computing platform as the base of its service.

The Agawi Game Partnership Gold program the company started this week is intended to bulk up the game options for Microsoft’s fledgling Windows 8 platform—which many game developers aren’t keen on—but also to further tie it to Microsoft.

Why is this pertinent to Microsoft’s next Xbox? The code-named Durango, or Xbox 720, is confirmed to be yet another of Microsoft’s consumer devices that will run on the Windows 8 operating system. Microsoft general manager Brian Hall said as much in August while discussing Outlook.com in an interview, confirming that next version of the email app “coming out with Windows 8, with the new version of Office, with the new Windows Phone, and the new Xbox.”

Since Agawi already has experience running its service on multiple platforms, it seems like a perfect fit for Microsoft’s home console. The only question is whether or not Microsoft will adopt it as a core Xbox 720 feature. Microsoft is hiring cloud gaming engineers at the moment. It began actively hiring former OnLive employees following the company’s closure in August. “We are eager to speak to individuals and teams affected by the OnLive transition,” read a posting from Microsoft, “With the stunning success of Xbox/Kinect and accelerated growth of this business, we looking to add key players who want to make a real impact in creating groundbreaking new products and services.”