Microsoft has confirmed plans to launch a free, ad-supported tier for its Xbox Cloud Gaming service later this year. This announcement follows rumors and user reports indicating the introduction of this new option.

Some users have noted seeing a message stating "1 hour of ad-supported playtime per session," suggesting the impending availability of this free tier.
Sources indicate that Microsoft aims to roll out this feature by the end of the year, joining other platforms like Nvidia’s GeForce Now, which provides an ad-supported subscription allowing users to play for one hour daily at 1080p resolution.
This initiative will enable gamers to explore AAA titles without requiring a significant investment in high-end gaming PCs, particularly as the costs of memory chips and graphics cards continue to rise.
Source