Since Scarlett’s announced, a rumor popped up that there would be a cheap version of the system that supported xCloud only and no physical media. When asked in a recent Gamespot interview about it, Spencer quickly shot it down, saying that as now there is no plans for a streaming only system, and they plan to keep xCloud and their dedicated hardware separate for the time being.
“We are not working on a streaming-only console right now,” Spencer said. “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.”
So there you have it. Of course, that won’t stop the speculation, but that’s part of any next generation hardware cycle. But as it stands now it looks like Scarlett is just one device. We’ll just have to wait and see until next year to see what it’ll be able to do and not do.
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Source: https://gamingbolt.com/phil-spencer-denies-streaming-only-next-generation-xbox-is-in-development
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