Microsoft is still working on a next-gen alternative to Xbox Project Scarlett, new report suggests

Is Microsoft still interested in engineering a streaming-only console to stand alongside Xbox Series X? A new report suggests that is indeed the case, with Microsoft preparing to bet big on Project xCloud as it prepares a digital-only variant of Xbox Project Scarlett.

One of the biggest surprises of the Xbox E3 2019 showcase wasn't an announcement but an absence. As the company teased its next generation offering – Xbox Project Scarlett, releasing in 2020 alongside Halo Infinite – many were surprised to see just the one console being discussed up on stage. That's because rumours have persisted for months now that Microsoft is building two systems for the next-generation, codenamed Anaconda and Lockhart.

Anaconda was to be a bleeding edge, premium console – the type Microsoft discussed openly at E3 2019 in Project Scarlett – while Lockhart was to be a more affordable alternative to it, a digital-only device and cloud-streaming ready machine that would be slightly more powerful than the Xbox One X. Of course, given that it was a no-show many were beginning to believe that it had been killed off.

A new report from Thurrott’s Brad Sams suggests that this console is indeed still in development, built to utilise the flexible Project xCloud technology Microsoft has begun to showcase this year. Interestingly, Sams' reporting goes on to suggest that Lockhart would effectively be a low-power box with the capacity to generate a game's main "virtual environments" before the core elements of the game – such as graphics, text, NPCs, you name it – are then streamed in.

While it's difficult to know what difference having local hardware would make to game-streaming, or what effect it would have on minimising compression, input lag, buffering, and the variety of other concerns so often being levied at game-streaming as a concept it's certainly an interesting idea. Particularly so as it's so different from Google Stadia, which sees the tech-giant trusting that its infrastructure will be able to handle streaming triple-A games to a variety of different devices through a web browser without any loss in quality.

Still, you should watch the full video for more information. There's a good chance that we won't hear much more on this console in an official capacity until Microsoft gets both Xbox Project Scarlett and Project xCloud out the door.

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Josh West is Editor-in-Chief of GamesRadar+. He has over 18 years of experience in both online and print journalism, and was awarded a BA (Hons) in Journalism and Feature Writing. Josh has contributed to world-leading gaming, entertainment, tech, music, and comics brands, including games™, Edge, Retro Gamer, SFX, 3D Artist, Metal Hammer, and Newsarama. In addition, Josh has edited and written books for Hachette and Scholastic, and worked across the Future Games Show as an Assistant Producer. He specializes in video games and entertainment coverage, and has provided expert comment for outlets like the BBC and ITV. In his spare time, Josh likes to play FPS games and RPGs, practice the bass guitar, and reminisce about the film and TV sets he worked on as a child actor.