Phil Spencer said he chose to prioritize development for the Xbox streaming device because he struggled to make it affordable.
Announced last summer, the standalone device, codenamed 'Keystone', is designed to allow gamers to stream Xbox games to TVs or monitors without the need for a console.
Microsoft's head of games, The Verge's To the Decoder podcast He said the company made the Keystone and some employees took it home to test it (seen in a photo of Spencer's office last month) but it turned out to be very costly to produce an Xbox streaming device, even though it worked well.
“The Keystone console that people now see was more expensive than we wanted the app to be when we built it with the hardware inside, and we decided to focus this team's efforts on delivering smart TV streaming.” said.
“With Keystone we're still focusing on that, we can get the right costs but when you get the Series S at $299, you're going to see some price promotion, like on vacation. Obviously the Series X will be higher, I think the price increase to the S has to be pretty substantial for a broadcast-only box to make sense.
“I want to be able to include a controller in it when we go to do this,” he continued. “Can we produce the right product at the right price, or if we can't, how can we focus the team's efforts? And we decided to make the TV app with Samsung. We are really happy with the results there.”
Spencer continued to discuss a price range he would like to reach when the Keystone is released.
“I don't want to specifically announce pricing, but in my view it should be somewhere around $129-$99 for it to make sense that we're not at the asking prices. A group of us took it home and it worked. It worked really well.
“When building new products, do you always have the right design? Do you have the right user interface? Do you have the right customer offer? The client bid includes price, and I think we all knew we were a little out of place on price.
“I won't go into hardware design, but if this thing is standalone, that is, it doesn't live in the TV's power supply and the integrated circuits that are already in the TV, then you have to bespoke everything.
“However, we have made some decisions to make it easier. This thing looks like an Xbox when turned on, the UI, everything works, but I'd like to point out that some of the silicon choices we made while designing it didn't allow us to reach the price point we wanted.”
last month a Wall Street Journal In his interview, Spencer said he still thinks Xbox will release a game streaming device, but that may be "years from now".
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