Microsoft CEO Satya Nadella was recently interviewed by Fortune magazine with a particular focus on the gaming space, now much more prominent inside the company than in previous years.

During the interview, the Microsoft CEO stated that the living room remains a 'super important' place where people play games, which is why the plan is to continue doing consoles as well.

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The living room is not the only place where people play games—the living room is a super important place where they play games. We still love our console, we’re going to have another console. We’re going to keep at it because we think that there are people who want to play games on the console. And it just so happens that people love to play games on PCs. We didn’t have much of a value proposition to them other than saying we have the Windows operating system, and we’ve done everything we’ve can to serve developers there. But we’re now going to do even more on the PC. With Project xCloud, we can reach anybody on a mobile phone to play AAA games [gaming’s equivalent to Hollywood blockbusters]. It’s more of an extension than to say what we were doing [in the living room] was wrong or not or didn’t make sense. It’s just that hey, it has become clearer and bigger, we have been able to really jump on that.

As suggested by the Microsoft CEO, though, Project xCloud is the big reason why the Redmond-based giant is investing so much in first-party studio acquisitions and enhancing the overall Xbox Game Pass libraries on Xbox and PC. With Project xCloud, Microsoft intends to tap into vast markets such as India and Africa, as well as increasing the potential customer base in North America and Europe.

However, console gamers are unlikely to go anywhere any time soon and Microsoft reckons localized hardware will remain superior to the cloud experience for the foreseeable future. The next Xbox console, codenamed Project Scarlett, has been confirmed to be due for the Holiday season next year.