Xbox Unveils Next-Gen Console “Project Keystone” Aiming for Cloud Gaming Revolution

In a surprise announcement during today’s Xbox Developer Direct, Microsoft unveiled “Project Keystone,” its next-generation console that promises to blur the lines between traditional gaming hardware and cloud-based experiences. Positioned as a bold leap forward, Keystone represents the company’s ambitious effort to make high-fidelity gaming more accessible and untethered from prohibitively expensive hardware.

Phil Spencer, Head of Xbox, described Project Keystone as “the culmination of our vision to make console-quality gaming available anytime, anywhere.” Unlike its predecessors, Keystone is designed specifically around Xbox Cloud Gaming, leveraging powerful Azure data centers to stream games rather than relying on local processing. Equipped with minimal onboard storage and ultra-fast Wi-Fi 6E capabilities, the device is closer in form to a streaming stick than a traditional console.

Despite its compact stature, Microsoft is betting big on Keystone’s potential to bring console-quality gaming to a global audience. “Whether you’re in a dorm room, a hotel, or a small apartment — all you need is a screen and an internet connection,” Spencer added.

Though pricing details remain under wraps, insiders cite sources suggesting a sub-$100 price point—positioning it as possibly the most affordable entry into modern console gaming to date. The device will come preloaded with the Xbox app UI and allow users to access their Game Pass Ultimate libraries instantly. Xbox’s teams also confirmed compatibility with popular wireless controllers and expanded support for third-party streaming apps like Netflix and Disney+, turning Project Keystone into a multifunctional entertainment hub.

While some hardcore fans may remain skeptical about ditching local hardware power, industry analysts are calling this a “clear step toward the inevitable cloud-only future.” The timing of the announcement follows closely on the heels of increased Game Pass subscriber numbers and ongoing expansions into new cloud regions.

Project Keystone doesn’t aim to replace the Xbox Series X|S; instead, it complements them—targeting gamers who value portability, affordability, and instant access more than 4K textures or local rendering performance. With more details expected at this year’s Xbox Showcase in June, all eyes are on Microsoft to see if Keystone becomes the bridge between casual players and the next phase of gaming evolution.