Microsoft Reportedly Preparing New Streaming-Only, Next-Gen Xbox Consoles

During E3 2018, it was revealed that Microsoft was building its own cloud gaming system. Now, a new report claims that the new system will be called Scarlett Cloud and it will play a major role in Microsoft’s next Xbox consoles.

Microsoft is said to be releasing two versions of its next-generation “Scarlett” Xbox consoles. One version will provide gamers with the traditional gaming experience, while the other will be dedicated to streaming games from the cloud, according to Brad Sams of Thurrott.com. Sams’ sources claim that this version of the next-gen Xbox will be a “lower-powered device” that will ship alongside the direct successor to the Xbox One.

This cloud gaming console will have a limited amount of processing power, which is believed to be part of Microsoft’s way of fixing latency issues that are typically associated with streaming games. The console will work by running part of the games locally, while the rest is streamed from the cloud, as explained by TechCrunch.

This makes it possible for Scarlett Cloud to be suitable for a wide range of games, including those that are considered to be too latency-sensitive to be streamable, according to ArsTechnica. This includes online multiplayer shooters and first-person shooters. Cloud games will also be playable on all of Microsoft’s Scarlett devices, which means that neither version of the console will have exclusive streamable games.

Since the streaming-only version of the next-gen Xbox will be lower-powered, the console will likely arrive with a much lower price tag than full-fledged Scarlett Xbox. This should help expand the reach of Microsoft in terms of console gaming and it could continue to bolster its game services revenues.

Microsoft doesn’t really make a lot of money in hardware sales, but it does make a lot of money from its gaming services like Xbox Live, Xbox Game Pass and from selling games. A streaming-only Xbox console should be ideal for the company’s strategy, since it would most likely require longer subscription payments.

So, when will the new Scarlett Xbox console’s be released? Sams’ sources say that the development of the cloud version of Scarlett “is further along” in the development cycle than the traditional console. Analysts previously estimated that a new Xbox console might not launch until 2020. Sams did say in April that Microsoft might introduce its next-gen console “within three years,” which is still applicable to the given timeframe.