Xbox Lead Phil Spencer reveals the team failed to hit the target price for Keystone

In October, Microsoft Gaming CEO Phil Spencer accidentally made a noise in the gaming community when an unreleased Xbox white hardware photobombed his post that was supposed to focus on a Vault Boy statue. Fans believed it was the most-awaited ‘Keystone’ streaming console. Spencer recently confirmed it and revealed the reason why it is not yet available in the market… price tag.

Vault Boy left the shelter and stopped by my office to celebrate the #Fallout25 Anniversary. Congratulations to the @Fallout @Bethesda teams on this major milestone for an iconic franchise. pic.twitter.com/hGoN1sAQRK

— Phil Spencer (@XboxP3) October 10, 2022

In a recent interview on The Verge’s Decoder podcast, Spencer admitted that the figure spotted on his October Twitter post was indeed the Keystone. At that time, no direct confirmation was released, though the Twitter account of the Xbox Team teasingly commented on the post, reminding the Xbox Lead “…about putting old prototypes on your shelf….”

“The reason it’s on my shelf is because the team rolled up their sleeves, and in nine months, they built that thing,” Spencer told The Verge. “A bunch of us took it home, and it worked. It worked really, really well.”

This should sound like good news for a lot of individuals still hoping to get their hands on the Keystone. Spencer specifically stressed that the hardware “looks like an Xbox with the user interface and everything works,” which means the company managed to inject all the promised features and characteristics rumored about it except for one thing: the price.

.@xboxP3 tells @reckless that Keystone, the Xbox streaming stick, just cost too much. But what is the right price? pic.twitter.com/W3kGdB3YuP

— Decoder Podcast (@DecoderPod) November 15, 2022

According to Spencer, while the hardware works like clockwork, the team wasn’t able to hit the planned price for the Keystone due to the components used to build it.

“It was more expensive than we wanted it to be when we actually built it out with the hardware that we had inside,” admitted Spencer.

One of the best qualities of Keystone that should make it attractive was the rumor about its affordability. The project was originally targeted to cost just around $129 or $99. However, according to Spencer, applying the traditional bundling strategy of the company (by including a controller and silicon components) caused the product to reach the price range of the $299 Xbox Series S. And given that the Series S also has cloud connectivity capability, the small difference in the price gap could make it hard for Xbox to attain the affordable-cloud-gaming-access image it wants for the Keystone. With this, Spencer explained that the team resorted to just bringing the feature to the latest 2022 Samsung TVs.

“We decided to focus that team’s effort on delivering the smart TV streaming app,” said Spencer.

Spencer, nonetheless, tried to uplift the hopes of everyone still expecting a new cheaper hardware product from Xbox. Although cloud gaming is accessible now in a variety of ways, Spencer said that the team is still considering making the Keystone concept a reality in the future.

“With Keystone, we’re still focused on it and watching when we can get the right cost,” hinted Spencer.