He spoke about the development of FSR Redstone, which was also used to bring improvements to PSSR upscaling. Similarly, FSR Frame Generation has also been described by him as being based on “co-developed technology”. This work between the two companies has been progressing, and Cerny is quite happy with how it has been turning out so far.

“Just to clarify a few things about the collaboration with AMD, the new PSSR uses the same core co-developed algorithm as FSR Redstone’s Upscaling (to avoid confusion, I’ll use the new names today rather than FSR4),” Cerny shared. “FSR Frame Generation is also based on co-developed technology (or as my good friend [SVP and GM of AMD’s Computing and Graphics Group] Jack Huynh puts it, ‘co-engineered technology’). I’m very happy with how that work is progressing, and an equivalent frame generation library should be seen at some point on PlayStation platforms.”

As for what these “PlayStation platforms” might be, Cerny noted that Sony doesn’t have any major technological releases planned for this year. “All I can say is that we have no more releases planned for this year. And I look forward to discussing this more in the future!”

Back in October, Cerny and Huynh had discussed the kinds of improvements that the two companies had been working on. The collaboration involves bringing major graphical improvements while also reducing processing overhead.

“The challenge comes in how we implement these systems,” said Cerny in a video. “The neural networks found in technologies like FSR and PSSR are incredibly demanding on the GPU. They’re both computationally intensive and require speedy access to large amounts of memory. The nature of the GPU fights us here.”

Among the technologies introduced in the video were Neural Arrays, which would involve GPU compute units tackling larger problems together rather than each one tackling smaller problems individually.

“We’re not linking the entire GPU into one mega unit,” explained Huynh. “That would be a cable management nightmare. But we are connecting [compute units] within each shader engine in a smart, efficient way. And that changes the game for neural rendering. Bigger [machine learning] models, less overhead, more efficiency, and way more scalability as workloads grow.”

Along with Neural Arrays, the two also discussed Radiance Cores, which are built with Neural Radiance Caching as their foundation. The technology will handle ray tracing and path tracing in real-time, and will ultimately constitute a “brand new rendering approach for AMD,” said Huynh.

More recently, Sony released an upgraded version of PlayStation Spectral Super Resolution, which made its debut on PS5 Pro with the release of Resident Evil Requiem. The feature is gradually rolling out to other titles, including Silent Hill 2 Remake, Final Fantasy 7 Rebirth, Nioh 3, and Cyberpunk 2077, among others.

“Thrilled to partner with [Xbox] and [Asha Sharma] on Project Helix, a multi-year deep co-engineering partnership driving next-gen performance, breakthrough graphics, and compatibility with your existing Xbox game library,” wrote Huynh on social media.

While exact technical details about FSR Diamond haven’t been revealed yet, Huynh has described it as being “built” for next-gen neural rendering, machine learning-based upscaling, machine learning-based multi-frame generation, and next-gen ray regeneration for ray tracing and path tracing.

While all quite impressive, multi-frame generation will undoubtedly be one of the flagship features of FSR Diamond, since this would be the first time it makes it into FSR. While AMD’s FSR has previously featured frame generation, it has only generated a single frame between two of the game’s frames.

For the sake of comparison, multi frame generation has been one of the core features of Nvidia’s DLSS since Early last year when the company launched DLSS 4. Since then, the feature has seen further improvements with the addition of Dynamic 6X multi frame generation as of earlier this month.

Interestingly, according to industry insider KeplerL2, FSR Diamond is slated to be exclusive to AMD’s RDNA 5 architecture. This means that we likely won’t see the technology make its way on to older AMD PC GPUs.

It is worth noting that AMD has also been working closely with Sony to build next-generation graphics rendering pipelines that we will likely see in the latter’s next-generation console. Huynh, along with PS5 and PS5 Pro lead architect Mark Cerny, had discussed the results of this collaboration back in October.

Among the new features discussed were Neural Arrays, Radiance Cores, and Universal Compression, which would give game developers more tools to enhance the visual fidelity of their titles while still ensuring that the console hardware can keep up. For more details, check out our thoughts on how this new technology points to the PS6.

“The challenge comes in how we implement these systems,” said Cerny. “The neural networks found in technologies like FSR and PSSR are incredibly demanding on the GPU. They’re both computationally intensive and require speedy access to large amounts of memory. The nature of the GPU fights us here.”

In the meantime, vice president of Xbox Jason Ronald had revealed that early versions of the Project Helix development kit will start being shipped out to developers in 2027.

“Project Helix is powered by a custom AMD [system on chip] and co-designed for the next generation of DirectX and FSR to unlock what comes next,” said Ronald during GDC 2026. “It delivers an order of magnitude leap in ray tracing performance and capability, integrates intelligence directly into the graphics and compute pipeline, and drives meaningful gains in efficiency, scale, and visual ambition. The result is more realistic, immersive, and dynamic worlds for players.”

There have also been plenty of recent reports about the hardware powering Project Helix, and how it would compare with the rumored hardware under the hood of the PS6. While the former is believed to be stronger on paper, the difference is ultimately believed to be “basically not that meaningful.”

Resident Evil Requiem, out now, is the first title to support it, with Sony claiming that it helps “keep both frame rate and image quality high.” Regarding its benefits, especially with the new hair tech, Capcom’s Masaru Ijuin, Senior Manager Engine Development Support Section R&D Foundational Technology Department, explained how, ” So when you see light passing through hair or strands folding over each other, they’ll look even crisper than on a regular PS5.

As for the future, “multiple” existing titles will be upgraded to support the new PSSR via a software update. Once installed, you can select “Enhanced PSSR Image Quality” for titles that support the upscaling tech on PS5 Pro, which should ideally result in “noticeably crisper graphics.”

Stay tuned for more details on the upgraded PSSR’s rollout next month. In the meantime, Resident Evil Requiem is available for Xbox Series X/S, PS5, PC, and Nintendo Switch 2. Check out our review – we scored it a 9 out of 10, praising the visuals, attention to detail, combat and dual playstyles, though the final hour somewhat stumbles compared to the rest of the game.

“In gaming, revenue increased 50% year-over-year to $843 million. Semi-custom sales increased year-over-year and declined sequentially as expected,” said Dr. Su (via IGN). “For 2026, we expect semi-custom SoC annual revenue to decline by a significant double-digit percentage as we enter the seventh year of what has been a very strong console cycle. From a product standpoint, Valve is on track to begin shipping its AMD-powered Steam Machine early this year.”

Valve’s Steam Machines have been highly anticipated for how disruptive it will be in the market. Among many other issues, the global memory shortage has meant that building a new gaming PC has become an expensive concept due to the high prices of DDR5 RAM. Along with this, its use of the Arch Linux-based SteamOS has also been seen as having major implications, especially thanks to dissatisfaction in the current state of Windows 11. To top it all off, the Steam Machine is expected to have at least one major launch game: Half-Life 3. That last one comes courtesy of a rumor from back in December, which noted that Valve was initially aiming for a Spring 2026 launch. Soaring RAM prices, however, seemingly had a major role in changing these plans.

Despite all the excitement behind the Steam Machine, however, the pre-built PC isn’t expected to be priced competitively with PS5 and Xbox Series X/S consoles. Valve has remained quiet about its price tag, which has led to quite a bit of speculation revolving around its hardware specs and performance capabilities. According to Linus Media Group’s Linus Sebastian, however, his discussions with Valve’s engineers resulted in the room going silent when he brought up the potential of a $500 price tag.

“I can’t tell you what the price will be, because I literally don’t know,” said Sebastian on an episode of WAN Show. “When I said I’m disappointed it isn’t going to follow a console pricing model, where its subsided by the fact that manufacturer is going to be taking 30 percent of every game sold on it over the lifespan of this thing, because I feel that would be a more meaningful product, they asked what I meant by console price and I said $500. Nobody said anything, but the energy in the room wasn’t great.”

The Steam Machine was unveiled alongside VR headset Steam Frame and a new take on the Steam Controller. Valve has described the PC as running on an AMD Zen 4 six-core CPU at 4.8 GHz, a semi-custom AMD RDNA3 GPU with 28 compute units, 8 GB of GDDR6 VRAM and a max sustained clock speed of 2.45 GHz, and 16 GB of DDR5 RAM. With these specs, Valve claims it can run games in 4K/60 FPS thanks to FSR.

“Development of Microsoft’s next-gen Xbox featuring an AMD semi-custom SoC is progressing well to support a launch in 2027,” said Dr. Su during the earnings call, as caught by Tom’s Hardware. While she didn’t mention Sony, it is likely that AMD’s close work with the PlayStation maker as part of Project Amethyst also means that it has been working on chips for the PS6 as well.

The Xbox chip being developed by AMD has been codenamed Magnus, and is said to be powered by Zen 6 and 6c cores handling CPU duties and RDNA5-based compute units for GPU tasks. CPU cores will be helped by a 12 MB L3 cache, while the GPU is expected to run off 68 compute units, 4 shader engines, and a 24 MB L2 cache.

Little is currently known about the next-generation Xbox. However, a report from back in October has indicated that it will be priced at over $1,000. This is due to the fact that it will be a powerful machine and the bill of materials that has already exceeded $999. Microsoft is also not expected to sell the console at a loss since the next Xbox is rumored to also support third-party game platforms like Steam and GOG.

Typically, quite a bit of revenue from console games comes from the sale of each piece of software through the Microsoft or PlayStation Stores or physical copies. If a console were to allow the installation of Steam, however, Sony or Microsoft would be missing out on that money.

This rumored high price of the console is also supported by Xbox president Sarah Bond having previously referred to the next-gen console as offering a high-end experience with a “very premium” design. “The next-gen console is going to be a very premium, very high-end curated experience,” she said during a tour of Xbox’s research and development building.

While the consoles might be in danger of being delayed by an extra year while everyone waits for memory prices to stabilize, Microsoft has also been making some moves in the software department to improve the gaming experience. With the console reportedly capable of running “full bore” Windows, the company has been working on a “Full Screen Experience” for Windows 11’s Xbox PC app, with planned “major updates” for the latter.

Sony, for its part, has also reportedly finalized the hardware specs for the PlayStation 6, with a report indicating that it will run on an AMD chip codenamed Orion, and will have a relatively low power draw of around 160 watts. For comparison’s sake, the PS5 Pro draws between 200 and 240 watt.

While the hosts largely discuss the recent issues with the operating system, Alex Battaglia goes into quite a bit of detail about how gaming performance has been impacted for Windows 11 users. He also noted that the silent nature of the update happening automatically in the background added even more to users’ frustration.

Along with this, Battaglia also spoke about how the performance issues had largely gone unnoticed by many until Nvidia released a driver hotfix for its graphics cards that acknowledged the lower performance on Windows 11 and aimed to fix it. Interestingly the performance issues are most visible in a few games, including Ubisoft’s Assassin’s Creed Shadows.

“That KB patch silently destroyed performance in at least two games,” said Battaglia. “The one I tested for this segment is Assassin’s Creed [Shadows]. I loaded it up and I was like ‘oh this runs like ****.’ And I knew that something was wrong. So I double checked, and after having installed the hotfix driver you can see how big of an issue this is.” He follows this up by showing side-by-side video comparisons of the title’s performance before and after the hotfix driver’s installation.

Before Nvidia’s hotfix was applied, running Assassin’s Creed Shadows on the Windows 11 update in question with overpowered hardware – an AMD Ryzen 7 9800X3D CPU and an Nvidia GeForce RTX 5090 GPU – and visuals set to 4K and the max preset and DLSS set to Quality resulted in an average frame rate of around 34 FPS. After the hotfix driver, the frame rate went all the way up to 71 FPS, which is noted as being a performance boost of around 206 percent.

When it comes to just how this Windows 11 patch was released, Battaglia noted that there might be a few reasons, such as there being some sort of issue with how Nvidia’s graphics cards tap into the DirectX APIs. However, he said that Microsoft shouldn’t be releasing a stealthy operating system update that breaks things. Rather, the company should be telling Nvidia that there is a problem.

“If it wasn’t an Nvidia [DirectX] conformity issue, this means Microsoft is releasing patches to Windows that [the company] is not sure what [the patch] is doing,“ said Battaglia. “It is silently killing performance in games, and you are left with the user, or Nvidia after the fact, or AMD or Intel, having to figure this out via their own testing regimens. Hence why, more than a month later, we see an update here from Nvidia.”

“The timing is just really bizarre, and I don’t think it paints a really good picture here of how Microsoft stewards the operating system, regardless of who, at the end of the day, is responsible for the actual issue occurring. Because they’re the one updating their operating system, and maybe you should delay that patch until Nvidia actually has proper support for it in a driver to fix the conformity issue.”

Battaglia also spoke about future plans considering the current downward trajectory of Windows 11, and how maybe he will start investigating a move to Linux for his PC gaming needs instead.

This partnership shouldn’t come as any surprise to someone that might be paying attention to the last several years – over a decade – of technology and how it has evolved. Sony and AMD first started working together for the PS4, which came out all the way back in 2013, and since then, the two companies have worked closely together on future tech as well, including the current-generation PS5 and PS5 Pro.

While these details have been known for some time now, the two companies have now revealed even more details about the kinds of projects that they have been working on together. In a recent video, PS5 and PS5 Pro lead architect Mark Cerny, along with AMD’s SVP and GM of Computing and Graphics Group Jack Huynh, have revealed three core new technologies that have been designed by the two companies together, which Sony will use in its future consoles, and AMD hopes to bring to all gaming platforms: Neural Arrays, Radiance Cores, and Universal Compression. And while these three technologies might still be a few years away, they will likely end up playing a major part in shaping gaming hardware moving forward, and some of the software improvements will also likely trickle down into current-gen offerings as well.

An important thing to keep in mind about these brand new technologies is the fact that they are far from being ready to show off to the world, let alone ready enough to be released in hardware. Both Sony and AMD have been designing these technologies by making use of complex simulations that allow them to gauge performance and throughout, all without having to commit fully to designing the appropriate hardware. However, results from these simulations have clearly been quite promising, since companies don’t tend to boast too often about new concepts they’ve developed that will never see the light of day.

Neural Arrays – Smarter, Scalable AI Engines

The first of the big three technologies is the concept of the Neural Array, which essentially brings about fundamental changes in how a GPU’s compute units are able to take on neural net and AI-related tasks. Traditionally, a GPU is made up of several smaller compute units. This, in turn, means that any data that has to be processed has to be broken down into smaller sets of problems that each compute unit can then work on. Neural Arrays were developed to change how this works, and in theory, allow multiple compute units to work together on larger data sets and problems together, rather than each working individually on their own problems.

While this might largely sound like technical jargon, it is worth noting that image upscaling tools like FSR and PSSR are both based on machine learning and AI. Neural Arrays would essentially allow for more powerful iterations of these image upscaling technologies, and even other features like frame generations would get a major boost not only in performance, but even image quality. Sony and AMD have already started working with Neural Array simulations to bring in improvements to their upscaling and denoising technologies. As a side-effect, Neural Arrays will also help in reducing how much processing power a GPU typically has to devote to machine learning tasks. This means that there can be more overall bandwidth available in a GPU to tackle tasks like shader code and general graphics rendering.

While this might sound great for future consoles, PS5 and PS5 Pro might also end up seeing some benefits, since Neural Arrays seemingly revolves more around software optimization and how development kits and game engines help in compiling games. Theoretically, if the technology is ready to enter the market while the PS5 and PS5 Pro are still relevant consoles, Sony could potentially push out firmware updates that bring some of these machine learning benefits to both systems while also working on integrating machine learning and neural net technologies into the PS6.

Radiance Cores – Dedicated Hardware for Ray Tracing

Ray tracing, on both consoles and gaming PCs using AMD GPUs, have traditionally been handled by compute units that are often forced to split their work load between their other tasks and doing the incredibly complicated mathematical operations typically involved in real-time ray traced lighting. To tackle this problem, Sony and AMD have been working on dedicated hardware that would allow the GPU to off-load the task of doing these complex mathematical operations, and instead focus on their actual job of rendering graphics.

Dubbed Radiance Core, this new hardware will be specially designed to handle all aspects of the maths that real-time ray tracing typically requires in a game, including path tracing and ray traversal, which tend to be the most compute-heavy aspects that GPUs have to tackle. The technology was derived from AMD’s Neural Radiance Caching, which the company had originally unveiled earlier this year.

While this might not sound revolutionary on its own, it is worth noting that the load being taken off the other compute units in a GPU will end up raising the bar exponentially for what kinds of visuals and game world are possible. Since the compute units won’t have to devote some of their precious processing cycles over to ray tracing-related operations, they will also be more capable of executing more complex shaders, while also maintaining higher frame rates. Radiance Cores might also ultimately make it possible for the PS6 to hit 4K while also maintaining high frame rates and featuring ray traced lighting.

While PS5 and PS5 Pro likely won’t see direct benefits from this owing to the fact that Radiance Core is a hardware-level innovation, we might still end up seeing some cross-generation games reap benefits, since observing how the ray tracing will look on next-gen hardware can ultimately allow developers to use the same style of lighting, albeit through “baked-in” rasterization, to still ultimately provide a visual uplift.

Universal Compression – A New Solution to Memory Bandwidth

One of the biggest bottlenecks that modern-day GPUs have to deal with regardless of the platform they’re on tends to be memory bandwidth. Essentially, a GPU can only process as much data as fast as it can if the data flowing into it is coming in at a fast enough rate. Sony deals with this problem on PS5 and PS5 Pro by making use of a technology dubbed Delta Color Compression (DCC), which allows the compute units to compress the data going through its memory bus in order to transmit more of the data. However, as its name might imply, DCC is limited in its scope of just what kind of data it can compress, largely bound to assets like texture data. Looking forward, both Sony and AMD have been working on a new technology dubbed Universal Compression.

Universal Compression is able to evaluate just about every bit of data that is headed into memory, and compress it as the data is passing through a memory bus. This means that a lot more data can then make its way into processing units across both the CPU and GPU, which in turn can then allow for the hardware to handle even larger files. While the technology might not sound all that fancy, especially when compared to something like Radiance Core, it still forms an important foundation on top of which more hardware can then be designed.

The benefits of Universal Compression are quite vast, to games generally looking better while running more smoothly thanks to more texture data being processed by the console at a quicker pace, but it can also enable new features, like gaming at 8K while still maintaining decent frame rates. Couple this with image upscaling technologies like FSR or PSSR and you can see even greater gains in compute power and efficiency, allowing for further refinements to be made to upscaled images and AI-generated frames. Since a major component of Universal Compression is likely at the software level, these enhancements could also make their way to PS5 and PS5 Pro, once again providing better visual fidelity beyond what the consoles are currently capable of.

How They Can Work Together

While each one of these new technologies can be considered a game changer, especially in the hands of experienced developer, technologies like Universal Compression and Neural Arrays working together would offer multiple-fold gains in terms of performance from compute units that are able to simultaneously work on larger blocks of data, more of which can also be transferred through an otherwise-constraining memory bus. Pair this combination with Radiance Core and you also get highly advanced ray tracing in the game without having to sacrifice much in the way of frame rates or texture quality.

In many ways, these new technologies can also be seen as forming something of a foundation on which the graphics hardware for the PS6 is being designed, since each one tackles one of the goals that Sony has with its gaming hardware. Neural Arrays and Universal Compression are able to grant major gains in efficiency and performance, while Radiance Core handles the visual fidelity side of things by offering more immersive lighting through path tracing, all without making too many sacrifices.

When it comes to hardware design, these technologies will likely also play a major hand in Sony’s future. Designing a GPU around these technologies, for example, means that less compute cores have to be used specially for things like machine learning, neural net and ray tracing. This would also lead to getting an overall more efficient console that doesn’t need as much power to run, while simultaneously also running much cooler, and thus not having problems that can arise related to thermal throttling – where a CPU or GPU has to forcefully slow itself down when it gets too hot from processing loads.

Long-Term Plans

It is worth noting that none of the three technologies is ready to hit the market just yet. Both Cerny and Huynh made it clear that they are currently still in the simulation stage of the research and development that goes into making these kinds of new technologies. However, both have noted that results from their simulations have already been quite promising. This means that, while we are unlikely to see these gains in performance and visual fidelity on currently-existing console hardware, it can be quite easy to bet that we will see them when the PS6 is eventually unveiled.

Once the technology has been developed and is finally out, however, we might also see quite a few of their benefits trickle down to older hardware and consoles. Sure, the PS5 and PS5 Pro aren’t going to be running games at 8K by any stretch. We can, however, expect to see rasterized lighting based on ray tracing models that were made for the PS6. Similarly, machine learning improvements to FSR and whatever the PS6 ends up using will also likely make their way down to PSSR, greatly improving visual fidelity.

Closing Thoughts

It’s difficult to argue against the idea that we’ve hit a plateau when it comes to the visual fidelity that can be achieved simply with raw horsepower. We last noticed this when the jump in visual quality of games from the PS4 to the PS5 weren’t as drastic as they were a couple of decades ago when we jumped from the PS2 to the PS3. However, improvements are still being made by using the horsepower we do have in smarter ways, and these three new technologies signify Sony’s and AMD’s approaches to the same concept.

In the video, Huynh goes into the role machine learning players in modern game development when it comes to offering developers cleaner pipelines and more efficient ways to render visuals while still having the technological headroom needed to create the massive worlds that players want.

“The challenge comes in how we implement these systems,” said Cerny. “The neural networks found in technologies like FSR and PSSR are incredibly demanding on the GPU. They’re both computationally intensive and require speedy access to large amounts of memory. The nature of the GPU fights us here.”

The technical discussion between Cerny and Huynh goes into detail about how the design of modern GPUs can often end up creating bottlenecks, since the smaller chips that GPUs are often made with also means that problems that compute units have to tackle have to similarly be broken up into smaller “bite sized pieces”.

To tackle this issue, Huynh revealed that Sony’s and AMD’s partnership gave rise to a new technology referred to as Neural Arrays. The general idea behind the technology is to have compute units teaming up to tackle large problems together rather than each compute unit handling its own individual smaller problem.

“We’re not linking the entire GPU into one mega unit,” explained Huynh. “That would be a cable management nightmare. But we are connecting [compute units] within each shader engine in a smart, efficient way. And that changes the game for neural rendering. Bigger [machine learning] models, less overhead, more efficiency, and way more scalability as workloads grow.”

The efficiencies offered by Neural Arrays as a concept have been described by Cerny as being a game changer for developers, especially in the development of next-generation image upscaling and denoising technologies like FSR and PSSR. Huynh also noted that these efficiencies will also lead to brand new uses for ML that engineers have just started to imagine thanks to the recent breakthroughs between the two companies.

Ray tracing has also been one of the subjects of research for the partnership. However, Cerny noted that the current iterations of ray tracing have been hitting limits of what can be achieved with modern hardware. To deal with this, AMD and Sony have spent two years rethinking the path tracing pipeline, from hardware all the way to software.

“Earlier this year at Computex, we introduced Neural Radiance Caching, a key part of FSR Redstone,” said Huynh. “Now we’re building on that with Radiance Cores, a new dedicated hardware block designed for unified light transport. It handles ray tracing and path tracing in real time, pushing lighting performance to a whole new level. Together, these form a brand new rendering approach for AMD.”

Radiance Cores will essentially take over all of the technical responsibilities of ray traced lighting that compute units typically have to deal with along with managing their shader software. This, in turn, frees up the compute units to tackle other things, while Radiance Cores can focus on path tracing, ray tracing, and ray traversal, all of which tend to be quite compute heavy.

The final thing revealed in the video revolves around the constraints faced by modern GPUs when it comes to memory bandwidth. Dubbed Universal Compression, the feature can evaluate every piece of data headed to memory, and compresses it when possible. This means that memory bandwidth usage can be reduced dramatically, since only the most important data is sent through the memory bus.

“That means the GPU can deliver more detail, higher frame rates, and greater efficiency,” said Huynh. Cerny noted that this new technology will allow GPUs to even exceed the paper specs of its memory bandwidth thanks to the high level of efficiency offered by the compression technique.

“There’s a multitude of benefits from this, including lower power consumption, higher fidelity assets, and perhaps most importantly, the synergies that Universal Compression has with Neural Arrays and Radiance Cores, as we work to deliver the best possible experiences to gamers,” said Cerny.

These technologies are still quite new, however, and, at least for the time being, they only really exist in simulation form. However, the results from this partnership have seemingly been promising, with Cerny noting that we might get to see them in future console generations as well. Huynh noted that these technologies will also make their way on to other gaming platforms as well.

“We are actively investing in our future first-party consoles and devices designed, engineered and built by Xbox. For more details, the community can revisit our agreement announcement with AMD.”

Microsoft announced its multi-year partnership with AMD back in June to “co-engineer silicon across a portfolio of devices, including our next-generation Xbox consoles,” teasing a potential Xbox handheld. The former has yet to announce its next Xbox, much less a release window.

However, even Corden added “at least for now” regarding current plans. Whether they change down the line remains to be seen, especially with extensive layoffs this year and declining Xbox hardware revenue. That’s not even including retail stores like Costco that no longer carry the console for sale.

On the bright side, Microsoft is releasing the ROG Xbox Ally and Ally X on October 16th for $599.99 and $999.99, respectively. Pre-orders are currently open, and despite some backlash to the pricing (which Microsoft tried and failed to reduce), it’s still selling quite well.

Microsoft’s decision to shelve its own internal handheld system came about due to the company wanting to avoid taking the risk of such a high minimum order. As for AMD, the chip maker wanted such a high order to justify its own research and development investments in a dedicated system-on-a-chip (SoC) for Microsoft. According to KeplerL2, Microsoft, looking at industry-wide handheld sales figures – with the Steam Deck having sold around 5 million units and other companies like Asus and Lenovo having only sold around 1 to 2 million units of their devices – made Microsoft want to avoid the risk.

According to further posts by KeplerL2, the handheld device made by Microsoft on its own would have been a full-fledged portable gaming console rather than just being a handheld PC like the Steam Deck. For context, reports have indicated that Sony is looking at putting out its own handheld console in line for launch with the next generation of its PlayStation consoles.

Reports that Microsoft had cancelled its handheld Xbox came up shortly before the company unveiled the ROG Xbox Ally line-up alongside Asus. First indications of this arose in May, when the company was believed to have halted the development of its handheld in favour of focusing on the handheld experience of Windows 11 instead. These improvements will eventually be seen when the ROG Xbox Ally systems finally hit store shelves later this month.

A later report, courtesy of The Verge’s Tom Warren, indicated that plans to make the handheld were ultimately cancelled, with Microsoft instead opting to partner up with hardware companies that might already be working on their own handheld gaming PCs.

“I still think we’ll see next-gen Xbox hardware from Microsoft, but I also strongly believe we’ll see multiple devices from PC makers like Asus that will also be considered next-gen Xbox consoles,” wrote Warren.

He also noted that Microsoft might be internally working on emulation to eventually allow Xbox games to run on Windows systems. To do this, an internal team is said to have been formed focused on game preservation, with efforts to get Xbox, Xbox 360 and Xbox One games running on modern PC hardware.

In the meantime, check out details about the ROG Xbox Ally and Xbox Ally X, which are priced at $599.99 and $999.99 respectively. Rumours have indicated that the companies also tried to lower the pricing for both systems.