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Microsoft's cloud-only Xbox still in development - report

Microsoft is seemingly still interested in making a dedicated streaming device to complement its next-gen Scarlett console offering.

Microsoft has reportedly reverted to its original plan for next-gen to release two consoles, except the other one isn't the less powerful version of Scarlett - that one is dead. No, this is the streaming-only device meant to be the lowest entry point into next-gen.

Nearly a year ago, reports suggested Microsoft will go into the next generation of consoles armed with a traditional box (Scarlett), and another for streaming. Project xCloud had not yet been shown off publicly at that point, so the thinking, at that point, was that game streaming works best with a piece of hardware doing some light lifting.

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This may still be the case, because according to a new report from Thurrott's Brad Sams, the cloud-exclusive Xbox is still in active development. Sams suggests the low-power box will be just capable enough to allow a player to "move around in a virtual environment", but crucially, game elements like NPCs, interactables, text and even graphics won't be there.

This is obviously not playable, but the idea is that having movement calculations run locally reduces input lag compared to a 100% streamed game. Though this might make technical sense, it's hard to imagine the company pushing this hard unless the difference is really perceptible.

Of course, there's a lot we still don't know about the streaming market, and some segment of that audience may opt to pay $80 or so to get an experience better than running the game through a web browser.

You can watch the video above for the full breakdown.

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