By ADHEESHA DE SILVA

Microsoft is developing a brand-new game streaming service and the next Xbox consoles, the company has confirmed.

Head of Xbox Phil Spencer said Xbox Two would be the company's first foray into a video game streaming service. 

“Our engineers are building a game streaming network to unlock console gaming on any device,”  Mr Spencer said.

To date the company has had a subscription service called Games Pass where customers can download certain games to play.

In an article in Variety, Ubisoft CEO Yves Guillemot said streaming games was where the industry was going.

“There will be one more console generation and then after that, we will be streaming, all of us,”  Mr Guillemot said.

Currently, competitor Sony has a game streaming service called PlayStation Now which allows users to stream PlayStation games on PS4 consoles, Windows PCs and certain Sony smartphones.

Mr Spencer also said the Xbox team was "deep" into making the next generation Xbox consoles.

The Xbox One console was released in November 2013. Typically, Microsoft and Sony have released previous games consoles in eight to 10-year increments. However, with Microsoft’s very early announcement, the traditional life cycle might be reduced.

In an interview with Euro Gamer, Mr Spencer said that the announcement was a sign of Microsoft's continued commitment to video games.

"I want people to know that we're committed to the experience they love, of playing great games on a console on their television, and we think that's an important part of the future of our brand," he said.

But fans seem to think that the company’s "new consoles" won’t happen any time soon.