Like the X adorning its logo, Xbox always seems to be at a crossroads. Speculation on the platform’s future has been ever-present throughout 2024, if not for years’ prior, but talk’s been ramping up of late following Microsoft opting to abstain from giving Xbox Series X|S a mid-gen refresh. Sony’s PS5 Pro will have that corner covered, and it doesn’t seem as though Microsoft are concerned with conceding yet more console market share to Sony.
A report published by Windows Central indicates Microsoft is focusing on its next-gen hardware plans instead. There’s a tentative release date tied to these plans – November 15th, 2026, the 25th anniversary of the Xbox and marquee IP Halo – although this is pure speculation. 2026 is a couple of years earlier than the next generation is projected to land too. That said, it’d be an interesting time for Microsoft to unleash a new console given Sony would only be two years into the PS5 Pro’s lifecycle. The mantle of world’s most powerful console would presumably swing back to Microsoft come the release of Xbox 6, or whatever the decide to call it; a status Sony are banking on bringing Xbox players over to PlayStation with the dearth of an Xbox Series X Pro equivalent.
Are two short years worth uprooting yourself from the Xbox gaming ecosystem just to play games on the most technologically advanced console? Unless you’ve deep enough pockets to own both, you’ll want to continue with Xbox. This speculation, of course, is banking on Microsoft revealing something tangible on their next console, perhaps by the end of the year, but we’re getting ahead of ourselves a little bit. What has been tentatively revealed – as per the Windows Central report – is that Microsoft will be continuing the two-pronged approach to Xbox hardware next generation.
We’re expecting a console to follow up the Xbox Series X, but potentially in place of the Series S will be a gaming handheld akin to the Steam Deck or Asus ROG Ally. Were this true, then it’d make a lot of sense, more so than the two-tiered console system they’re operating now given some developers are opting to release their games with subpar performance to get them functioning on both the powerful Series X and less technologically sound Series S.
The handheld gaming market is growing and is forecast to be worth over $25 billion come 2031. Nintendo’s Switch 2 will drive this growth from a console standpoint. Sony’s PS5 Portal may contribute, although this isn’t a handheld acting as a substitute for owning a console. In basic terms, Microsoft capitalising on this growing market with the next-gen Xbox is a no-brainer but observing their financial results for the quarter ending June 30th, 2024, this rumour of a handheld gains weight. Xbox content and services revenue is up 61%, and gaming revenue is up 44%. This impressive upturn is largely attributed to Microsoft’s acquisition of Activision Blizzard and via licensing their IPs to cross-media properties such as the Fallout and Halo TV shows. The result – according to Phil Spencer – is Xbox has more players than ever, and these figures back up his claim.
Noteworthy of these figures is Xbox hardware revenue is down 42% year-over-year. And this makes sense given Microsoft themselves have undermined the importance of owning one of their consoles. Their revenue expansion comprises PC, mobile, and PlayStation – a ‘play anywhere’ mantra – with Xbox lagging behind. This does beg the question why they’re even bothering with another console; why aren’t they going all in on handheld? Presumably, their strategy will shift towards compelling Xbox players to own a console, a handheld, or both come next generation.
For her part, Xbox president Sarah Bond is promising “the biggest technological leap ever seen in a generation” with the next round of Xbox hardware. Analysing plainly, this presumably means the most technologically powerful console ever released, at a jump far superior to prior performance differences seen in past generation changes. But this could also indicate a plan to bridge the gap more closely between Xbox and Windows. It’s well documented that Microsoft Gaming CEO Phil Spencer wants to bring digital storefronts like Steam, the Epic Games Store, and even niche platforms such as itch.io, to Xbox. Should this desire come to fruition, the next -gen Xbox and its rumoured handheld would need to function more like a PC. It’d need to bring in APIs and drivers prevalent with Windows to deliver games from opposing storefronts. They’d need to manufacture their hardware with capability to eradicate porting and delivering games on two disparate systems.
It’s tricky to know exactly what Microsoft are going for here. Sure, having access to your Steam or GOG library on Xbox is a neat selling point. And, given Microsoft have begun passing their formerly platform exclusive games to Sony, would the Japanese giant do the same in return by allowing Xbox players to play PlayStation games ported to PC on their Xbox? But – and here’s the thing – wouldn’t PC players already using those platforms to purchase games already have, you know, a PC, or another device? Is there too big a risk in developing another Xbox purely for gamers who don’t currently have a device that can access Steam etc? Is there anything else that a next-gen Xbox could bring to the table to persuade players to stump up the cash?
Well, perhaps so with this next point: to future proof the next generation, Xbox president Sarah Bond has set up a new team dedicated to game preservation and forward compatibility. Now, Xbox’s backwards compatibility is second to none, but in looking to the future and forward compatibility Bond’s team aim to protect a gamer’s digital library across future hardware changes. A noble cause, of course, as this means – should the next-gen Xbox’s hardware be more closely aligned to PC, and thus development of future games for the platform focusing more on PC than console – then a gamer’s existing library would function perfectly on hardware that’s shifted to PC-like architecture. This is undeniably a cool selling point and could be an integral driver behind Sarah’s “biggest technological leap” claim.
Innovations in AI are also promised, although specific information is little light at present. All we know, as per emails shared as genuine by Windows Central, is that innovations in gaming AI will place players and developers first, delivering value in discovering, engaging, and creating. Presumably, more information will be shared publicly as presently these AI innovations sound like they encompass user experience – getting relevant games in front of interested players, for instance – and not strictly covering development or playing.
It’s tough not to see Microsoft as a wealthy video games publisher, and not a hardware seller. Their current ethos seems to be to get their games on as many platforms as possible, whether it’s their own or somebody else’s. Their boardroom has a reputation of killing the Xbox brand but given the speculation on their next generation hardware this is far from the case. Diversifying has always worked well for Microsoft, and diversification looks to be their mantra come the next generation. There are just too many question marks over whether another console is required given their plans to boost availability of their games to a wealth of other platforms. A future whereby those platforms are brought to Xbox is cloudy, but it can’t be argued against it being a great feature should they pull it off.
Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.
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