Microsoft eyes China gaming boom through secret Xbox game pass initiative ‘Saluki’

Microsoft appears to be plotting a major expansion into the lucrative but complex Chinese gaming market. A secret project codenamed 'Saluki' hints at bringing the popular Xbox Game Pass service to millions of new players, but it will face significant hurdles.

Microsoft is reportedly working on a landmark expansion of its Xbox Game Pass subscription service into China, a move that could unlock a massive new audience for the gaming giant. 

According to a recent report from The Verge, references to "Project Saluki" were spotted in an update to the Xbox PC application, with internal descriptions labelling the codename as a "China market expansion for Game Pass, Rewards, and subscription tiers."

While the company has not made an official announcement, the discovery signals a serious intent to enter one of the world's largest, yet most challenging, gaming territories. 

Microsoft already sells its Xbox consoles in the country and made history in 2014 when the Xbox One became the first video game console to launch there after a 14-year government ban was lifted.

A market of opportunity and obstacles

An expansion into China would give Microsoft access to an enormous and rapidly growing player base. The PC gaming market in the country is substantial, with projections for 2026 suggesting it could be worth between an incredible $82 billion and $96.69 billion. 

However, the market is notoriously difficult for Western companies to navigate due to a stringent regulatory environment overseen by the National Press and Publication Administration (NPPA).

Any company wishing to release a game must first gain approval from the NPPA, which involves a thorough content review. The number of foreign games approved each year is strictly limited, with projections for 2025 suggesting only around 100 imported titles would get the green light. 

Furthermore, regulations prohibit foreign companies from publishing directly, forcing them to partner with a local Chinese company. This complex landscape, combined with strict content rules against elements like excessive violence, has previously complicated any plans for a service like Game Pass, which relies on a large, rotating library.

A tailored approach for China

Project Saluki appears to be Microsoft's answer to these unique challenges. Rather than launching the standard version of Game Pass, reports suggest the company is developing a specialised service for the region. 

This would likely involve a much smaller, carefully curated library of games that have already been approved by Chinese regulators. The service may also feature unique subscription tiers and a greater emphasis on elements like in-game currencies, which are particularly popular with Chinese gamers.

This strategy follows other recent moves by Microsoft to strengthen its ecosystem in the country. In February 2026, the company partnered with Chinese tech giant NetEase to integrate a game accelerator tool into the Xbox PC app, a clear signal of its commitment to improving the experience for players in China.

What is 'Project Positron'?

The same Xbox PC app update also revealed another intriguing codename: Positron. This project is described as being created to "enable Disc2Digital," sparking speculation about its true purpose. 

It is not yet clear what this entails, but it could signal the return of a controversial feature Microsoft originally planned for the Xbox One. This system would have allowed players to convert their physical disc-based games into permanent digital licences tied to their account.

The initial plan was abandoned in 2013 following a backlash from publishers and retailers. However, with Microsoft increasingly pushing towards discless consoles, such as the all-digital Xbox Series S and the new white discless Xbox Series X, the idea may be making a comeback. 

Some insiders, according to Windows Central, speculate that Positron could be laying the groundwork for Microsoft's next-generation Xbox console, which is currently believed to be in development under the codename Project Helix.

Microsoft has been asked to comment on the projects, but has yet to respond. The leaks, however, paint a clear picture of a company making ambitious plans to expand its global gaming footprint.