Microsoft halts new Xbox because it's too expensive

Last month, you might remember that the internet all came together to play a fun game of 'what’s on Phil Spencer’s shelf' when the Xbox boss posted a picture of it in celebration of Fallout’s 25th anniversary. Eagle-eyed gamers were quick to spot that, moving past the big Vault Boy statue in the middle, what looked like a mini Xbox Series S could be seen.

However, Microsoft was quick to clarify that this mysterious new device was actually an old prototype of Keystone - AKA the Xbox streaming stick which, it’s believed, would allow users to play games without owning a proper Xbox console. At the time, a representative said that the company had “made the decision to pivot away from the current iteration of Keystone and are taking our learnings to refocus our efforts on a new approach”, and it now seems that we know what they meant by that.

Before we get into it, take a look at this satisfying Xbox 360 restoration video.

Speaking on The Verge’s Decoder podcast, Spencer revealed that the device had one major problem - its price: “Keystone was more expensive than we wanted it to be when we actually built it out with the hardware that we had inside,” he revealed. “We decided to focus that team’s effort on delivering the smart TV streaming app.

“When you’ve got Series S at $299 and like during the holidays, you’ll see some price promotions, I think in order for a streaming-only box to make sense, the price delta to [Series] S has to be pretty significant,” he continued. “I want to be able to include a controller in it when we go do that.”

Spencer was then asked what sort of price he’d be looking to at to release Keystone, to which he said: “I don’t want to announce pricing specifically, but I think you’ve got to be $129.99, like somewhere in there for that to make sense. We just weren’t there.”

However, this doesn’t mean you’ll never see the Xbox streaming stick come to fruition - he revealed that he and a number of other employees all have prototypes at home that work “really, really well”. He added: “With Keystone, we’re still focused on it and watching when we can get the right cost.”