Microsoft is building low-cost, streaming-only Xbox

Microsoft hasn’t said much about its next Xbox consoles other than to acknowledge than they’re in development. Details appear to be trickling out, though, and the biggest news may be what isn’t included. Thurrott tipsters have maintained that the next Xbox console family, Scarlett, will include both a conventional system as well as a cloud-only model designed to work in tandem with its game streaming service. It would sell for a lower up-front price, as it would forego the beefy processing power needed to run everything locally. However, it would also address some of the latency issues associated with existing services — it might not feel like a major compromise.

Reportedly, the console would have a “limited amount of compute” inside to tackle not just basics like controller input and visual output, but game elements like collision detection. Although the system might cost more than it did if Microsoft offloaded everything to the cloud, it’d offer a better experience while still remaining more affordable. And no, there wouldn’t be games limited to the conventional machine — they’d have to be compatible with both.

So long as the leak is accurate, the cloud version of Scarlett is poised to launch in 2020 alongside its traditional counterpart. There aren’t concrete specs at this point, but that may be expected at this early stage when Microsoft hasn’t necessarily locked down every feature. The bigger question is whether or not gamers will bite. This appears to be a bet that gaming will go the way of Netflix, with a huge library of content available from many of the devices you own. The company might be right about the always-connected nature of modern consoles, but that doesn’t mean gamers will embrace streaming with open arms. They may stick to local copies of games if they have concerns about quality and cost or, just want more control over when and how they play.

It was revealed at E3 last month that Microsoft was building a cloud gaming system. A report today calls that system Scarlett Cloud and it’s only part of Microsoft’s next-gen Xbox strategy. And it makes a lot of sense, too.

According to Thurrott.com, noted site for all things Microsoft, the next Xbox will come in two flavors. One will be a traditional gaming console where games are processed locally. You know, like how it works on game systems right now. The other system will be a lower-powered system that will stream games from the cloud — most likely, Microsoft’s Azure cloud.

This streaming system will still have some processing power, which is in part to counter latency traditionally associated with streaming games. Apparently part of the game will run locally while the rest is streamed to the system.

The streaming Xbox will likely be available at a much lower cost than the traditional Xbox. And why not. Microsoft has sold Xbox systems with a slim profit margin, relying on sales of games and online services to make up the difference. A streaming service that’s talked about on Thurrott would further take advantage of this model while tapping into Microsoft’s deep understanding of cloud computing.

A few companies have tried streaming full video games. Onlive was one of the first; while successful for a time, it eventually went through a dramatic round of layoffs before a surprise sale for $4.8 million in 2012. Sony offers an extensive library of PS2, PS3 and PS4 games for streaming through its PlayStation Now service. Nvidia got into the streaming game this year and offers a small selection of streaming through GeForce Now. But these are all side projects for the companies.

Sony and Nintendo do not have the global cloud computing platform of Microsoft, and if Microsoft’s streaming service hits, it could change the landscape and force competitors to reevaluate everything.

 

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