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Apple has just updated its App Store guidelines, and one of the changes mean that the company could allow game streaming services to come to the platform after all.
In dense language, rule 3.1.2 (a) now notes:
3.1.2(a): Games offered in a streaming game service subscription must be downloaded directly from the App Store, must be designed to avoid duplicate payment by a subscriber, and should not disadvantage non-subscriber customers.
What this means is xCloud could come to iOS, but each game in the catalogue needs to have an individual listing in the app store, so they could be reviewed and approved/disapproved individually by Apple and also reviewed by customers individually.
In addition, Microsoft would have a catalogue app which links out to each game in the collection.
Subscribers who subscribe outside of the app store can play without paying an additional fee, but Apple warns that subscribers who sign up using their platform should not be disadvantaged in any way (e.g. required to pay more).
The compromise by Apple should be doable by Microsoft, and it seems likely, given their cross-platform strength, that they will adapt to the new rules.
Apple will presumably hope the changes they have made will avoid more scrutiny by anti-trust investigators. This of course remains to be seen.