Microsoft froze the “cloud” version of Xbox — it was too expensive

At one time, Microsoft was working on a “very budget” version of Xbox — it was supposed to hold games from the “cloud” and not run them locally. The project was codenamed Keystone and even reached the stage of a working prototype: Xbox head Phil Spencer reports that it was created in just 9 months, and the company’s employees had the opportunity to test it in action.

But now in the interview to The Verge he informed that the project was frozen: “It was more expensive than we wanted it to be when we actually built it out with the hardware that we had inside. We decided to focus that team’s effort on delivering the smart TV streaming app.” Here Phil Spencer was referring to the Xbox TV app that Microsoft released for Samsung TVs and smart monitors this summer.

However, Microsoft is not abandoning its own “cloud” device completely: “with Keystone, we are waiting for the time when we can make it cheap enough.” Phil Spencer admits that the company considers $100-130 to be an acceptable price, but now such a device with a controller in the kit is not much cheaper than the Xbox Series S, which costs $299.

Of course, it could be made cheaper by refusing to equip it with a branded gamepad (and forcing players to additionally buy any compatible controller), but Microsoft does not agree to this: it wants to create Keystone as similar as possible to a regular Xbox console, from the equipment to the system interface.

Therefore, for the time being, the working prototype is gathering dust on the shelf (you can see it in the photo that Phil Spencer recently published on his Twitter), and Microsoft is waiting for the components to become cheaper.