The next Xbox console will reportedly not only come in the form of a regular console with hardware to perform the calculations locally, but also as a box where the games are largely streamed from Microsoft servers.
So these are two different consoles. The non-mainstream version of Xbox, which lacks hardware to run games locally, is expected to work with Microsoft’s yet-to-be-released game streaming service, according to the site of noted Microsoft follower, Paul Thurrott.
The latency that sometimes occurs when using cloud gaming services can negatively affect the gameplay experience, but Microsoft would have a solution for that, at least for those parts of the game where latency can be an issue. The delay could even be smaller than usual, i.e. if the cloud gaming service is physically close to, for example, the central Azure server for the multiplayer game.
The box will still contain hardware to perform certain calculations locally. This involves processing the input from the controller, image processing and collision detection. With this, part of the games on this model of the new Xbox console runs locally, with the rest being filled in by the stream from a Microsoft data center.
Earlier there was a rumor that both models will be released in 2020 and that the project is codenamed Scarlett. The development of the model for streaming would already be further than that of the regular Xbox. No specifications are yet known for this regular version, but there would be no difference between the two models in terms of supply and support for available games.