Microsoft’s head of Xbox and gaming, Phil Spencer, has confirmed the company isn’t working on a streaming-only console. Rumors previously suggested that Microsoft’s next-generation Project Scarlett console would ship with both a high-end version, and a “cloud console” with limited amounts of local compute for things like like controller input, image processing, and collision detection.

“We are not working on a streaming-only console right now,” explains Phil Spencer, Microsoft’s gaming chief, in an interview with Gamespot. “We are looking at the phone in your pocket as the destination for you to stream, and the console that we have allows you to play the games locally.”

Microsoft’s plans for a second console were scrapped earlier this year, thanks to developer concerns and a bigger focus on xCloud. Microsoft is now pushing ahead with its xCloud public trials, after showing off the cloud gaming service at E3 this year. A public beta is expected to launch in October, offering Xbox fans the chance to stream and continue some games on their phones.

Microsoft’s Project Scarlett console will include 8K graphics, SSD storage, and ray tracing support when it launches during the holidays next year. Microsoft is including a custom-designed CPU based on AMD’s Zen 2 and Radeon RDNA architecture, and it’s promising this new processor will be four times more powerful than the Xbox One X. Microsoft is also using fast GDDR6 RAM, and is focusing on improving framerates in games. Halo Infinite is the first confirmed launch title for Project Scarlett.