By David Snow • 6:45 am, May 27, 2022

Microsoft confirmed Friday it’s developing a low-cost streaming device that would allow users to play Xbox games and stream media without needing a full console. That could directly compete with Apple TV.

Meanwhile, Apple’s product — sometimes criticized as overpriced — may see a less-expensive iteration later this year, according to analysts.

Microsoft confirmed it is working toward the release of an affordable streaming device that would allow users to play Xbox games and stream media without the need for gaming console.

For years market watchers have noted Microsoft’s desire to offer gaming services to more people by removing the need to buy an expensive gaming console. A move in that direction resulted in the the Xbox Cloud Gaming platform, a software-based gaming option that works on many devices, including iPhone and iPad.

But the software giant has more plans. Microsoft revealed to Windows Central it is working on new Xbox hardware, codenamed “Keystone.” It’s a streaming device that may be similar to Chromecast and Google Stadia. It will connect to any TV or monitor via HDMI, allowing users to tap into Microsoft’s vast games catalog. And not just games, but any other streaming content Microsoft chooses to host.

The company offered no further details about the dongle or its launch date. It did say, however, said that it had decided to “pivot away” from its original vision for the device, which would allow it to “deliver Xbox Cloud Gaming to more players around the world in the future.”

Most likely that means the device will double as a set-top box, offering triple-A console games as well as access to popular streaming services and  media apps, such as Microsoft Movies & TV.

A while back Apple worked on an affordable ‌Apple TV‌ dongle, but then dropped those plans. However, Apple wants to launch a new version of Apple TV in the second half of 2022, according to analyst Ming-Chi Kuo. He said the new ‌Apple TV‌ will have an improved cost structure, which suggests a lower price point than the current ‌Apple TV‌, which starts at $179. That would make it more competitive with other streaming media players.

Whatever Apple TV‌ looks like by the end of the year, Apple Arcade — Cupertino’s subscription-based gaming platform — may struggle to compete with an inexpensive Microsoft dongle that can stream massively popular Xbox games and practically anything else.