Microsoft revealed its next-generation Xbox Project Scarlett console on stage at E3 earlier this month, but many had been expecting two consoles to be unveiled. Rumors previously suggested that Microsoft was working on a pair of new devices: one codenamed Anaconda that would be high-end, and another codenamed Lockhart that would be the more affordable option. Thurrott.com reports that Microsoft is now focused solely on a high-end Xbox console, under the broader Project Scarlett effort.

While Xbox chief Phil Spencer did reveal the company was “deep into architecting the next Xbox consoles,” at E3 last year, plans have clearly changed as only Project Scarlett was mentioned as a single console this year. Thurrott previously reported that Scarlett would ship with both a high-end console, and a “cloud console” with limited amounts of local compute “for specific tasks like controller input, image processing, and importantly, collision detection.” Windows Central also previously claimed that a cheaper Xbox One S-style console, codenamed Lockhart, would appear in holiday 2020 (the original article has since been replaced with an updated version).

At one point there were two next-gen consoles

Spencer addressed the use of “consoles” during a recent Business Insider interview. “Last year we said consoles, and we’ve shipped a console and we’ve now detailed another console. I think that’s plural,” says Spencer. “Right now, we’re focused on Project Scarlett and what we put on stage.”

Sources familiar with Microsoft’s plans tell The Verge that the plans for Lockhart were scrapped many weeks ago, thanks to developer concerns and a bigger focus on xCloud. While Microsoft may introduce a basic box to access xCloud in the future, the focus is a single Project Scarlett console for launch in holiday 2020 alongside Halo Infinite.

We understand that feedback from developers, and Microsoft’s shifting plans for underlying xCloud hardware has pushed the company to focus on just one next-generation Xbox. Digital Foundry first reported that Lockhart “certainly seems” like it has been killed recently, owing to developer confusion. Thurrott also suggests developers were focusing too much on optimizing for the lower specs of Lockhart than the true next-gen Scarlett console.

Microsoft’s strategy shift has also been driven by its xCloud plans. The software maker was originally planning to launch xCloud in beta with developers in mind to help them build cloud games instead of using local debug machines, and then launch the service to consumers at a later date. Microsoft has significantly increased its xCloud investments in the past year, and also scaled back its ambitions for public testing as it works on tweaking the underlying hardware powering the service to better deliver streaming on consoles, PCs, and TVs.

Microsoft had been anticipating Google’s entry into cloud game streaming, originally unveiled as Project Stream back in October, but Google’s progress on launch plans are far ahead of Microsoft’s own. The Verge originally unveiled Microsoft’s xCloud plans back in July, ahead of Google’s Project Stream test in October. Exactly a week after Google’s announcement, Microsoft confirmed the xCloud name and promised public trials in 2019. Microsoft originally promised game streaming to consoles, PCs, and mobile devices, but the company has now scaled back its plans to focus on phones initially.

Microsoft has been trying to get ahead of Google’s Stadia announcements ever since. The company demonstrated xCloud for the first time a week before Google’s Stadia unveiling, and then randomly revealed xCloud will support 3,500 games two weeks ahead of Google’s Stadia pricing and game details. Microsoft then went into E3 with very little to say about xCloud, apart from hints that the underlying hardware is going to change.

While Microsoft originally unveiled as a service built from Xbox One S hardware (four consoles per server blade), the company is now focusing its xCloud future on the power of its upcoming Scarlett console. “Project Scarlett and all of its power and all of its performance is the foundation of our future in console and the formation of our future in cloud,” said Spencer during his E3 keynote. Focusing solely on a Scarlett console in the living room and the cloud, partnering with Sony, and scrapping multi-console plans make a lot more sense for Microsoft as it seeks to battle a new and formidable competitor.