Microsoft’s streaming device Keystone shelved because it was too expensive, says Spencer

Microsoft was looking to get into the game streaming business with its own device, code-named the Keystone, but apparently, what the team designed would have been too expensive for consumers.

This is according to Microsoft Gaming CEO Phil Spencer, who told The Verge Instead, the team decided to focus their efforts on delivering the smart TV streaming app to Samsung TVs (thanks, ResetEra).

In May, a report surfaced saying that Microsoft was getting into the game streaming business with a device similar to the Amazon Fire TV Stick. The report was accurate, Microsoft decided on “a new approach”.

“[Keystone] it was more expensive than we wanted when we built it with the hardware we had inside,” Spencer said. “We decided to focus that team’s effort on offering the smart TV streaming app. With Keystone, we’re still focused on that and looking at when we can get the cost right.

“I think for a streaming-only box to make sense, the Xbox S price delta has to be pretty significant. I want to be able to include a controller when we do that. It was really just a matter of whether we could build the right product at the price right, or if we couldn’t, how could we focus the team effort? We decided to go make the TV app with Samsung, and we’re very happy with the results.”

A “correct price,” Spencer says, would fall in the range of around $129 or $99 to “make sense.”

“When you create 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? That customer proposition includes price, and I think we all knew that.” We were a bit out of position on price.”

Spencer went on to say that some of the silicon choices Microsoft was making when designing the device “just didn’t get us to the price point we wanted.”