This story comes from Zac Bowden at Windows Central (also picked up by Tom Warren at The Verge amongst many others)who noticed that a patent outlining details for a cloud streaming only console had been filed for the now cancelled Keystone project. This gives us our first really clear look at what the device would have looked like.

What happened?

Xbox Keystone was intended to be a dedicated streaming device for Xbox Game Pass, designed to sit under a TV and play games via the cloud. A patent was filed in June 2022, around the time initial details about Keystone were being revealed. We got our first glimpse of the device in the top right hand corner of this image from 2023.

• Square shape with a circular top, similar to the Xbox Series S vent
• Xbox power button and USB-A port on the front
• HDMI, ethernet, and power ports on the back
• Controller pairing button on the right side
• “Hello from Seattle” plate on the underside.

Why did they cancel it?

Microsoft scrapped the project due to an inability to bring the price down to the target range of $99-$129, which they felt was necessary for consumer appeal. Consoles remain popular household purchases but given the nature of streaming, and the over abundance of devices consumers have to do that already, it appears Xbox has taken the choice to pursue a software only approach to getting more of us streaming Xcloud games.

As Tom Warren notes in his story

Microsoft went on to launch an Xbox TV app instead. Available on 2022 and above Samsung TVs and monitors, the Xbox TV app launches games from Xbox Cloud Gaming and supports streaming games at 1080p at up to 60fps.

Edit – No sooner had we pressed publish on this story but Jez Corden reports that Xbox is partnering with Amazon to allow Xbox GamePass users to stream games to their TV, using their Amazon Firesticks.

Check out the story on Windows Central here!!

However if we take this story one stage further, and conflate comments made by Sarah Bond recently regarding exciting new hardware, we can surmise that Keystone was a victim not only of price but also a change of strategy at Xbox. The games industry is changing in the face of stagnating growth, with all the big players now targeting rival platforms (and their users) as opportunities for increased sales. Xbox will be looking at sales of the Nintendo Switch and the Steam Deck enviously and see handhelds as a new market to exploit. It therefore makes far more sense for Xbox to target the handheld market to drive sales and possibly Game Pass subscriptions, as we previously speculated here.

The Xbox handheld would round out the hardware offering nicely with the Series X at the top end, Series S for the budget concious, and the handheld for the enthusiast market.

Also take in to account that the new range of ARM powered devices has just launched with incredible performance and battery life. Whilst I am sure any new device will run a traditional x86 style chip the pressure for Intel and AMD to make chips with performance and battery life on par with the ARM varients is on.

Handheld Xbox – Coming sooner rather than later

What does the Xbox Showcase tell us about Xbox strategy?