Microsoft Halts Production of Keystone Streaming Console Due to High Costs

Phil Spencer, the head of Xbox, has provided more insight into why Microsoft has put its plans for a streaming-only console on hold. The project, codenamed 'Keystone', was deemed too expensive to produce. In an interview on The Verge's Decoder podcast, Spencer explained that the cost of building the device with the desired hardware was higher than anticipated, leading the team to focus on developing a smart TV streaming app instead. Spencer stated that the company is pleased with the results of its partnership with Samsung to bring an Xbox Cloud Gaming app to the latest smart TVs. To make Keystone a viable option, the price would need to be significantly lower than the digital-only Xbox Series S, which retails at $299. Including a controller in the package adds to the cost challenge. Spencer believes that a price point of $99 to $129 would be necessary for Keystone to be competitive, but achieving this while covering costs has proven difficult. The current economic climate and inflation have also raised concerns about pricing, with Sony recently increasing the price of the PlayStation 5 in key markets.