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Sources familiar with Microsoft’s Xbox plans tell me the company was prototyping a cloud-focused Xbox handheld previously. Microsoft has developed a lightweight version of the Xbox user interface that can run on handheld devices, dedicated cloud consoles, and TVs. While we’ve seen this interface appear on some Samsung TVs, the dedicated Xbox cloud console that Microsoft first announced in 2021 was cancelled as Microsoft pivoted toward the TV streaming app instead.
The Xbox maker had been very close to launching its dedicated Xbox cloud console last year before scrapping its plans just weeks before an announcement. The device, codenamed Project Keystone, was then spotted on Xbox chief Phil Spencer’s shelf in October, confirming that the company had manufactured some units.
Work on Xbox Cloud Gaming has slowed over the past year inside Microsoft, sources tell me. Microsoft previously promised that Xbox Cloud Gaming would support your existing game library by the end of 2022, but that never happened. Microsoft also scrapped plans to launch a dedicated version of Xbox Cloud Gaming that players could subscribe to instead of paying for the Xbox Game Pass Ultimate subscription.
That’s likely all because regulators around the world have been focused on Microsoft’s cloud gaming efforts as part of a review of its proposed Activision Blizzard deal. The UK’s Competition and Markets Authority even blocked the deal citing cloud concerns, and the European Commission shared similar cloud concerns but approved the deal thanks to cloud-related remedies.
It was also a key part of the FTC v. Microsoft hearing. In the weeks leading up to that hearing, a source told me that Microsoft had started temporarily reassigning people working on Xbox Cloud Gaming to other parts of Xbox. During the FTC hearing, Sarah Bond, head of Xbox creator experience, revealed that Microsoft decided against a separate version of Xbox Cloud Gaming after the company got more data on the success and popularity of the service. “We’ve gotten more clear on the costs related to it, and we have signed partnerships with others who provide those services,” said Bond in June.
Where is Microsoft’s Handheld Xbox? - The Verge
So they cancelled Keystone (cloud streaming box, which we knew about) but also a cloud-focused Xbox handheld and a cloud only tier for Game Pass. They've also reassigned people away from Xbox Cloud Gaming and work on it has slowed. Who can really blame them, after how much of a joke the CMA has been. Thank you CMA for halting progress, Lol.
