There have been rumors for both this console generation and the one to come that we may see streaming-only devices. At least for Microsoft's Project Scarlett, that won't be the case. Head of Xbox Phil Spencer recently denied the rumor of a streaming-only Xbox, stating that its only plans as of now are for dedicated hardware that uses a physical game and xCloud.
"We are not working on a streaming-only console right now," Spencer said to GameSpot. "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."
For the avid physical game collectors, this means it's not time just yet to ditch the bookshelf and/or storage bins. If the next gen is anything like the current one, then it's likely that there will still be digital-only options for most games for the same price and released at the same time.
Spencer still sees xCloud as a big component of the Xbox family, so cloud gaming isn't going away either. "It's one of the directions the industry is headed," Spencer said. "To me, it's about what you as a gamer want to do, and I'm not trying to tell you that owning a box that plays video games is a bad thing or that somehow that's not needed."
Spencer pointed out that the cloud streaming is an inevitability of gaming. Whether that's for consoles, phones, tablets, computers, etc, there are plenty of markets for digital-only games. Though, as long as there's enough demand for physical games, then those will likely stick around for quite some time, too.
One of the other reasons that Spencer is currently against streaming-only devices is that there are still too many issues around streaming devices. Whether that's lag, slow internet, etc., modern technology can't guarantee consistent steaming gameplay just yet. So until those technological hurdles are cleared, Xbox fans shouldn't expect a streaming-only console.