Contrary to recent speculation that Microsoft has cancelled plans to launch a low-cost console along with its next-gen Xbox, new rumours suggest that Microsoft is in fact working on such a device, and it will be designed for game streaming through its upcoming Project xCloud service. According to the source, the new console will bring xCloud to TVs easily and affordably. The device would help xCloud compete with several emerging game streaming services including Google's Stadia, EA's Project Atlas, and even a rumoured offering from Walmart. Project xCloud has so far been expected to be targeted at mobile gamers, even those with low-end hardware and slow cellular Internet connections.
News of a second low-cost Xbox console codenamed 'Lockhart', to be released alongside the more powerful 'Anaconda' Xbox One X successor, emerged late last year. The more affordable unit was reported to be powerful enough to handle games at 4K, and even feature an SSD for quick game loading. It was not associated with Project xCloud at the time, but it was not known whether the device would lack a disc drive and depend on digital game delivery.
Microsoft previewed the device codenamed 'Anaconda' and made the project's codename Scarlett official at the E3 game convention in June this year. The device will offer 120fps output and act as a personal xCloud game streaming server, allowing users to play their own games from other devices. The device will be backward compatible with current-gen Xbox One games, and is expected to go on sale in 2020.
At the time, no mention was made of 'Lockhart', and it was rumoured that the device had been cancelled altogether. Developers were said to be unhappy about the effort needed to support both experiences, and Microsoft was reportedly worried that if developers targeted the lower quality and then scaled up, the more powerful Xbox console would not look good when pitted against Sony's next-gen PlayStation.
'Lockhart' (or its replacement) is now reported to feature only very basic local processing power, relying on xCloud for the majority of game rendering. According to the source, journalist Brad Sams, the device is now seen as a bridge to bring xCloud games to people's TVs. In a video published to his own YouTube channel, Sams says the console might not launch alongside 'Anaconda' but it is actively being developed.
Project xCloud was first announced in October last year, with the official announcement describing it as a "multi-year journey". Trials are expected to begin in October 2019, and the company has also said that thousands of current and future Xbox games will be able to be ported over with minimal effort from developers.
Microsoft also said last year that it was testing the service internally, and that games would be playable smartphones and tablets using touch or an Xbox controller with low-speed connections. The service is powered by Microsoft's Azure cloud computing infrastructure platform.