Rumours emerge about future Xbox Scarlett consoles

As we've discussed on the blog before, one of the big surprises in a relatively news-free E3 was Microsoft's openness about their plans for future consoles. Speculation before the conference began suggested that we could be in the midst of the final 'console gaming' generation, with Sony and Microsoft shifting their focus to streaming-based platforms.

We've already seen Microsoft dip their toes in the streaming waters (excuse the pun) this year with the Game Pass initiative. This lets gamers pay a subscription fee, which then grants them access to a vast library of games, similar to how Netflix or Spotify work.

Some believe this is a sign of things to come. Could we soon see the end of physical media altogether, and simply have a streaming service that can be plugged into a range of devices in order to access games?

Well, Microsoft boss Phil Spencer's comments at E3 clarified that wasn't the case. Instead, he expected Microsoft to potentially release multiple consoles, covering both streaming-based services and classic consoles. This is, for now, probably the best solution; the demands of streaming games, particularly at high resolutions, are too great for many internet connections currently. Another key issue is latency, particularly with online play; streaming games are far more susceptible to lag between controller inputs and those inputs being recognised. Additionally, many gamers still put great stock in owning physical copies of games in order to add to their collection.

Earlier this week, Thurrott published some more details on what Microsoft are referring to as Scarlett. According to Thurrott's report, there will be two main consoles produced as part of the Scarlett project, and they will both represent the next step from the Xbox One.

The first console - Scarlett - will be much of what we've come to expect from a home console. All the games will be played locally, either via physical disc or downloads located on a hard drive connected to the console. This console will cost a similar amount to what we've come to expect from new consoles.

The second console - Scarlett Cloud - is where it gets interesting. It will still need to be bought physically, and hooked up to a TV as you would a regular console. This is because Scarlett Cloud contains some rudimentary hardware, designed to tackle some of the aforementioned issues with latency when streaming games. The games themselves will be streamed, and the inputs from the console and the information from the stream will be knitted together in the cloud.

The upshot of this is that the Scarlett Cloud console could potentially end up costing substantially less than Scarlett and other consoles have traditionally at launch. Essentially, if you have access to fast, reliable internet and don't mind not owning your games, Scarlett Cloud could prove to be a big money saver. Thurrott also reports that they expect both versions of the console will be able to play all games - there would be no awkward non-Cloud situations.

Thurrott's report is well-sourced, citing Microsoft insiders. While it's impossible to ascertain the exact veracity of such reports, it would certainly make a lot of sense for Microsoft to take this approach.

In this generation, they have lagged behind Sony significantly. Initially hamstrung by pricing the Xbox One higher than the PS4 and insisting gamers buy the bundled Kinect camera, sales of the Xbox have struggled ever since. They've been held back further by Sony's ability to churn out brilliant exclusive games repeatedly.

However, the Scarlett Cloud would give them a big advantage going into the next generation of consoles. Not only would it be highly cost effective, but it requires enormous technical expertise and vast infrastructure. While Sony have the former, they are behind Microsoft in the latter.

If this report comes to fruition, it could prove to be the breakthrough that Microsoft need to gain a critical advantage in the next generation.