Xbox boss Phil Spencer revealed Microsoft’s decision to “pivot” of its previously announced Game Pass streaming box earlier this year was due to pricing issues, with the company not being able to get the device within its desired price range of $99-$129.
Speaking on the latest episode of The Verge’s Podcast decoder (as spotted by VGC), Spencer explained, “The console we built that people have now seen … was more expensive than we wanted when we built it with the hardware we had inside.”
Microsoft has never officially revealed this version of its streaming box, dubbed Keystone – a standalone device using a familiar Xbox user interface, according to Spencer – but it caused tongues to cringe when a the prototype appeared in a photo of the Xbox boss’ desk last month.
“A group of us took [this version] home and it worked out…really, really well,” Spencer added.[But] When you create new products, it always comes down to whether you have the right design? Do you have the right user interface? Do you have the right client proposition? And the customer proposal includes price, and I think we all knew we were a little out of position on price.” That, he said, was due to “some of the silicon choices we were making back when we were designing”, as well as Spencer’s desire to include a controller.
As for Microsoft’s target price, while Spencer”[didn’t] want to announce pricing specifically,” he said “I think you have to be $129, $99, like somewhere in there for that to make sense.” He elaborated further elsewhere in the podcast, explaining, ” When you have Series S at $299…I think for a streaming-only box to make sense, the price delta over S has to be quite significant.”
Although Microsoft hasn’t given up on its ambitions for an Xbox streaming box – it has said it will “refocus [its] efforts on a new approach” earlier this year – Spencer recently told the Wall Street Journal any such device from the company is now likely to be “years away”.