At this year's E3, Microsoft had a lot to say about its high-end Xbox One successor (code-named "Project Scarlett") and about its previously announced (and newly demoed) Project Xcloud streaming gaming service. But the company was less forthcoming about long-standing reports of low-cost, streaming-focused Microsoft hardware that would bring Xcloud games to the TV easily.

In a new video, Thurrott's Brad Sams (who has a strong track record when it comes to reporting insider information from Microsoft) says that the streaming box is "still being actively developed" inside Microsoft despite the continued public silence from the company itself. "I'm hearing this project has not been killed and is being actively worked on."

According to Sams, Microsoft's streaming hardware would "make the [streaming] gaming experience just a little bit better than if it was playing from a TV or something like that." That's because the low-end hardware would itself have a "marginal amount of compute [power]" that would allow it to handle basic gameplay elements like movement and collision detection locally, with minimal latency. "Everything else would just be streamed from Xcloud," as Sams put it.

It's an interesting theory, but as Sams and others have previously suggested it would essentially require splitting up games into two "slices"—one designed to run locally on low-end hardware, the other designed to be streamed from Xcloud's high-end servers. That might help with perceived latency for the player, but it could be a major headache for developers used to single-system coding.

Still, Sams says his sources suggest Microsoft as a whole is becoming "really confident" in the potential of the Xcloud service and that this kind of streaming box could make it much easier to stream games to a TV at low cost. Sams estimates the hardware could come in as low as $60, or up to $80 with a controller thrown in. That would undercut the $130 price Google is asking early adopters to pay at launch for a Stadia controller and Chromecast Ultra hardware. But Sams says he's not sure if Microsoft's low-end streaming box would launch alongside "Project Scarlett" or if it will even see release at all in the end.

Sams' report comes shortly after multiple sources suggested Microsoft has abandoned internal plans to release a lower tier of local gaming hardware as part of its next-generation console plans. The mid-tier console project, known internally as "Lockhart," has now reportedly been placed on hold in favor of focusing on a single home-based successor to the Xbox One.

That tracks somewhat with Microsoft's Phil Spencer talking about "the next Xbox consoles [plural]" at E3 2018, while only pointing to a singular "Project Scarlett" console at this year's show. And Sams' sources suggest that Lockhart has been phased out, in part because the Xcloud-based streaming box could satisfy price-sensitive gamers more effectively without confusing the market by offering a "strange middle ground."