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Phil Spencer On Why The Xbox Streaming Console Isn't Ready Yet

Spencer says the delta between the Series S ($300) and the streaming device needs to be bigger.


Microsoft Gaming CEO Phil Spencer has commented on the company's plans for an Xbox game-streaming device--codenamed Keystone--saying the team decided to rework the unit this past May because it was proving to be too expensive. This Keystone device was recently spotted on Spencer's shelf, sparking new discussion about it.

Speaking on The Verge's Decoder podcast, as transcribed by VGC, Spencer said Microsoft opted to focus more on building the new Samsung smart TV Xbox app and shift away from the Keystone device for the time being due to costs coming in higher than it wanted.

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With the Series S starting at $300, Spencer said the delta between the S and the streaming device would need to be "pretty significant" for it to make commercial sense. Spencer said the Keystone device, whenever it's released, needs to be between $100-$130. Spencer's desire to include a controller in the box made it difficult to hit that price point.

"I think you've got to be $129, $99, like somewhere in there for that to make sense in my view, that we just weren't there. We weren't there with the controller. And I love the effort," Spencer said. "The reason it's on my shelf is the team rolled up their sleeves and in nine months they built that thing. And a bunch of us took it home and it worked. It worked really, really well."

Spencer went on to say that the Keystone device was designed as standalone unit and because of this, it required everything to be "bespoke." In the end, the device cost too much to produce due to "some of the silicon choices" Microsoft was making at the time.

Microsoft still plans to release a streaming Xbox device at some point, but it probably won't be soon.

In June 2021, Microsoft announced plans to create its own Xbox streaming device to help Xbox reach an even wider audience. The idea is you'll be able to play Xbox games with no additional hardware, except for a controller. This is a very big deal because it opens up a potentially much larger audience for Xbox: people who don't want to spend hundreds of dollars for a console but still want to play games on their TV.

Looking ahead, Microsoft has said it plans to raise prices on Xbox products, though this won't happen until after the holiday season. Microsoft has not yet said if the price hikes will be for consoles, games, accessories, or its flagship Game Pass subscription service.

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