Microsoft seems to be signaling that the next generation of Xbox hardware won’t be centered around a traditional console launch. The news comes via an announcement today from Xbox president Sarah Bond that the company has entered into a “strategic, multi-year agreement” with hardware and chip manufacturer AMD to “co-engineer” a number of devices, including the “next generation” of Xbox consoles.
Her description of those next-generation Xbox consoles heavily implies the company isn’t restricting itself to a singular device that sits under the TV—and that future hardware won’t restrict players to the Xbox store. “This is all about building you a gaming platform that’s always with you, so you can play the games you want across devices anywhere you want, delivering you an Xbox experience not locked to a single store or tied to one device” she stated.
Breaking away from making Xbox a singular device—and opening it up to other video game stores—would be a major diversion from the conventional product strategy for video game consoles.
Earlier in the video, Bond specified that these future devices could be used “in your living room, and in your hands.” It’s entrusting AMD to build the graphics chips that will allow these devices to display higher-fidelity 3D visuals—a common expectation of new console launches.
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The two companies are also promising to deliver “more immersive gameplay” using “the power of AI.” It’s unclear if that’s referring to gameplay built on generative AI or existing video upscaling technology like the kind AMD employs on devices like Valve’s Steam Deck.
“This is an Xbox” is the future of Xbox
Microsoft has been keen to unbind itself from the traditional console product strategy for over a decade. In 2013 it released the Xbox One, a formidable video game console hampered by early marketing that prioritized its potential as a home multimedia device and the packed-in Kinect motion controller.
It would later abandon those selling points under the leadership of Phil Spencer (now Microsoft CEO of Gaming), pivoting first to a studio acquisition strategy to bolster its first-party offerings for Xbox, then folding those offerings into a subscription service strategy with Xbox Game Pass. Game Pass promised easier access to games through a subscription and making them accessible on more devices through cloud streaming (the notion that Xbox was acquiring studios like Activision Blizzard for the purpose of releasing games exclusively on Xbox consoles prompted regulatory scrutiny over the $69 billion acquisition).
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In 2024 it hawked this strategy under a prophetic marketing campaign called “this is an Xbox,” referring how Xbox games can now be accessed on a wide variety of devices.
In the background, console competitors Sony and Nintendo dominated their respective ends of the console market. Sony’s first-party strategy led the PlayStation 4 to outsell the Xbox One, and the PlayStation 5 is currently outselling the Xbox Series X. For a time the Nintendo Switch outsold both companies until the PlayStation 5 claimed the crown in 2021 (fresh off its 2020 launch).
It’s not immediately clear what would differentiate these next generation Xbox consoles from PCs and portable PCs that allow players to purchase games from multiple storefronts and play on the go. Bond stated that Xbox continues to “work more closely” with the Windows team to ensure “Windows is the number one platform for gaming.”