Phil Spencer confirms Xbox streaming device is still years away from release due to high cost

Phil Spencer discussed Project Keystone's status and cost in a recent podcast

In a recent podcast, the Head of Xbox, Phil Spencer, revealed the current status of the Xbox streaming device, which had been confirmed to be in development this summer.

The CEO of Microsoft Gaming spoke on The Verge's Decoder podcast, released Tuesday, reiterating that the project for an Xbox streaming console, codenamed Keystone, is still years away from hitting the market. 

Spencer said Keystone "was more expensive than we wanted it to be when we actually built it out with the hardware that we had inside." Asked about the right price of the device, Spencer commented: "I don’t want to announce pricing specifically, but I think you have to be somewhere around $129, $99 for that to make sense in my view."

He admitted that the decision to bundle the device with a controller, combined with some hardware choices for the streaming box itself, made it impossible to reach that target price tag.

Beating the Xbox Series S' price tag by much is key for the success of an Xbox streaming-only console.

Microsoft

Spencer explained that in order for the device to be viable, it needs to be much cheaper than the Xbox Series S, which sells at $299 or even less during price promotions.

Unable to bring Keystone's price to the desired range, the team decided to deprioritize the device's development in favor of a smart TV streaming app in partnership with Samsung.

Spencer also confirmed that the Keystone prototype is indeed complete and fully operational: "The reason it’s on my shelf is because the team rolled up their sleeves and in nine months they built that thing. A bunch of us took it home and it worked. It worked really, really well."

He teased the device in a tweet in October, in which we saw Keystone sitting on the top shelf in his office.

So, despite the device being unfit for the market at its current production cost, having a finished prototype means it might still see the light of day in the coming years, if Microsoft figures out a cheaper way to make it.