The Xbox that never was: Our first detailed look at the 'Keystone' cloud streaming console design

What you need to know

• A newly discovered Microsoft patent has given us a closer look at the canceled Xbox Keystone streaming console.
• The device was designed to sit under a TV and stream games via Xbox Game Pass.
• Keystone was canceled after Microsoft was unable to price it reasonably.

Back in 2021, Microsoft announced that it was working on a dedicated streaming device for Xbox Game Pass. That device was later revealed to be codenamed Keystone, which took the form of a streaming box that would sit under your TV, cost a fraction of the price of a normal Xbox, and enable the ability to play Xbox games via the cloud.

Unfortunately, it appears Microsoft has since scrapped plans to ship Xbox Keystone due to an inability to bring the price down to a level where it made sense for customers. Xbox CEO Phil Spencer is on record saying the device should have costed around $99 or $129, but the company was unable to achieve this.

This means we never really got a chance to see what Xbox Keystone looked like. The closest we ever got was in a photo posted by Phil Spencer, which just so happened to include a front-on view of the Xbox Keystone device on a shelf. That’s as much as we’ve ever seen of the console, that is until now.

Thanks to a patent discovered by Windows Central, we can finally take a closer look at the box Microsoft had conjured up internally. First up, the patent reveals that the console took the form of an even square with a circle shape on top, similar to the black circular vent on an Xbox Series S. The front of the box had the Xbox power button, and a USB-A port.

Around the back, there were three additional ports; HDMI, ethernet, and power. On the right side of the console there was appears to be an Xbox controller pairing button, and the underside featured a circular “Hello from Seattle” plate that the console sat on, similar to the Xbox Series X.

This patent was filed in June 2022, which was around the time when the first details of Xbox Keystone were being revealed. Sadly, Xbox Keystone in this specific form is unlikely to ever to see the light of day, but at least we now know what it would have looked like.

We still don’t know much about what powered things under the hood, including what kind of OS or firmware it ran. Was it a fully fledged Xbox OS with local game support stripped out? Or was it running something lighter with an Xbox Game Pass app on top? We don’t currently know, and likely never will.

Keystone is gone, but Microsoft isn't backing down from cloud

Microsoft has given up on its Xbox keystone console, at least for now, but that doesn't mean they've given up on cloud. 

The biggest barriers to cloud right now revolve around the business model. Running cloud gaming servers 24/7 is incredibly expensive, and Xbox Game Pass Ultimate at $15 per month doesn't cover the costs by itself. At least in theory, in-game purchases and outright game purchases would help improve the business model to some degree, but gatekeeper companies like Apple and Google work hard to prevent that business model from evolving. Microsoft is known to be working on a mobile gaming store for Android and iOS of its own, but I have absolutely no idea how they're going to get people to download it. It won't appear on Android and iOS by default, much like cloud gaming doesn't, and the audiences across mobile expect ease of access as their north star. 

A console like Keystone would help cut through this, but like my colleague Zac Bowden noted above, Microsoft was unable to get the price down. People would expect a device that can only play streaming games to cost around $99, and that was the target for Keystone, but the demand for components (boosted by the AI gold rush) has kept prices of computing components irregularly high.

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In lieu of a dedicated device, Microsoft told me in LA for the Xbox Games Showcase 2024 that they're seeing huge growth with TV apps, such as those included by default on the Samsung TV Gaming Hub. I've heard Microsoft has been experimenting with delivering PC cloud games too via Xbox Cloud Gaming, which would boost the catalog. Microsoft is also known to be working on allowing players to bring their existing game libraries into cloud and buy cloud games to own, pending discussions with third-party publishers and license holders. 

Cloud might be additive today, but it's important that Microsoft keeps a foot in the door in this space. One day, cloud gaming could be indistinguishable from local playback, and platforms like NVIDIA GeForce Now is proving that the technology is completely and utterly viable. Xbox Cloud Gaming has some catching up to do on the tech side, but there's no reason to think they won't be able to in the future.