It looks like the journey to next gen and Xbox Scarlett starts here, with Microsoft announcing xCloud - a new streaming service that will play Xbox games on anything with an internet connection. Versions of Halo, Gears, Forza and Cuphead have all been shown running on a variety of mobile and tablet devices, with public trials due to start in 2019.
Microsoft states that the tech uses stripped down Xbox One consoles built into server blades that can play games scaled according to the device and connection you're accessing them on. It's currently being tested internally with mobile phones and tablets using both Xbox wireless controllers via Bluetooth or on-screen touch controls. And, if you're thinking about trying to fit all those controller buttons on a phone screen, Microsoft claims to be developing "a new, game-specific touch input overlay that provides maximum response in a minimal footprint for players who choose to play without a controller".
Microsoft says it's working on various solutions to networking and video encoding; using dynamic scaling and other ways to minimise latency and provide what it claims will be a console level experience on whatever you're playing on. The current test service is apparently running on 10 megabits per second, pushing the upper limits of 5G Wi-Fi speeds which isn't even really a thing yet for most people.
At E3 Microsoft said it was already working on streaming tech, as well as the next generation of Xbox consoles, notably in the plural. At the time the rumour was that included a full fat next gen console, as well as a lower spec streaming focused one. If that's the case then this could be the first step in that direction, using the tail end of this generation to test and shape tech for the future. Microsoft describes this as a "multi-year journey" and, after a spending spree that saw Microsoft acquire five new studios, the publisher's obviously working towards first party content to help sell Xbox in the future. Whatever you're playing on.
The testing that's due to start in 2019 apparently so the teams involved can "learn and scale with different volumes and locations". Those currently include 54 regions of its Azure cloud computing regions across 140 countries.
You can see more of the future with the best upcoming Xbox One games