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Phil Spencer says Xbox shelved game streaming box because it cost too much

Couldn't hit desired $99-129 price point.

Xbox boss Phil Spencer has revealed Microsoft's decision to "pivot away" from its previously announced Game Pass streaming box earlier this year was due to pricing concerns, with the company unable to get the device within its desired $99-$129 price bracket.

Speaking in the latest episode of The Verge's Decoder podcast (as spotted by VGC), Spencer explained, "The console we built that now people have seen...was more expensive than we wanted it to be when we actually built it out with the hardware that we had inside."

Microsoft never formally revealed this version of its streaming box, codenamed Keystone - a standalone device utilising a familiar Xbox user interface, according to Spencer - but it did set tongues wagging when a prototype showed up in a photo of the Xbox boss' office last month.

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"A bunch of us took [this version] home and it worked...really, really well," Spencer added. "[But] when you are building new products, it's always about, do you have the right design? Do you have the right user interface? Do you have the right customer proposition? And the customer proposition includes the price, and I think all of us knew that we were a little out of position on price." That, he said, was down to "some of the silicon choices that we were making at the time we were designing", as well as Spencer's desire to include a controller.

As for the price Microsoft had been aiming for, while Spencer "[didn't] want to announce pricing specifically", he did say "I think you've got to be $129, $99, like somewhere in there for that to make sense". He elaborated further elsewhere in the podcast, explaining, "When you've got Series S at $299...I think in order for a streaming-only box to make sense, the price delta to S has to be pretty significant."

While Microsoft hasn't abandoned its ambitions for an Xbox streaming box - it said it would "refocus [its] efforts on a new approach" earlier this year - Spencer recently told the Wall Street Journal it's now likely that any such device from the company is "years away".

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Matt Wales

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Matt Wales is a writer and gambolling summer child who won't even pretend to live a busily impressive life of dynamic go-getting for the purposes of this bio. He is the sole and founding member of the Birdo for President of Everything Society.

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