Xbox was also preparing a third console and decided to temporarily cancel it  

Because he failed to catch his price target

Microsoft started this generation with a rather different strategy, bringing to market not one, but two different consoles, the more powerful Xbox Series X and the smaller and more affordable Xbox Series S . However, what many may not know is that the company was also working on a third, even more economical model, the so-called ‘Project Keystone’.

A photo of the Xbox in question was recently leaked by Microsoft’s head of gaming, Phil Spencer himself, who has now confirmed that the company is still working on this model , but there’s a reason it hasn’t been released yet: the price .

Microsoft wants this cheaper Xbox, which won’t have powerful specs but will only play games via streaming technology , to cost under $129 or even $99 , including the controller. Speaking to The Verge, Spencer said:

The console that we made and that the world has now seen, the Keystone, was more expensive than we wanted it to be, with the hardware we had inside. So, we finally decided to focus the efforts of this team on creating the streaming application for Smart TVs.
With Keystone, we’re still focused on price and how we can get it to the right level. However, when we have the Series S at $299, which during the holidays you’ll also see it at some discount, and when we obviously have the Series X higher, I think for an Xbox streaming exclusive to make sense, the price difference with the S it must be quite important.
I don’t want to announce any specific pricing, but I think it has to be less than $129, to $99 or thereabouts, to make sense. We just hadn’t gotten there. We weren’t there with the controller.

For the record, in the same interview, Spencer talked about several other topics, such as the much-discussed acquisition of Activision Blizzard.