A short while ago, there were insider reports alleging that Microsoft was about to extract itself from the first-party hardware space for the first time in Xbox brand history. But Microsoft strongly pushed back on that, and has done so one more time via Sarah Bond in a Variety(?) interview mainly about the just-launched, $1000 ROG Xbox Ally, a new Xbox-branded third-party handheld.
Here’s what Bond said about next-gen consoles or even an in-house handheld:
“We are 100% looking at making things in the future,” Bond said. “We have our next-gen hardware in development. We’ve been looking at prototyping, designing. We have a partnership we’ve announced with AMD around it, so that is coming. What we saw here was an opportunity to innovate in a new way and to bring gamers another choice, in addition to our next-gen hardware. We are always listening to what players and creators want. When there is demand for innovation, we’re going to build it.”
Sort of weird phrasing of “looking at making things,” but the rest seems pretty definite, confirming next-gen hardware is “in development.”
Other news stories lately have been about some retail outlets reducing or no longer stocking Xboxes, which has happened in some instances, but not in others that were reported. But a question when it comes to Xbox making more hardware is…why?
Xbox has self-admittedly lost the “console war” to Sony, which has dramatically outsold Xbox for two generations now. Hardware declines have continued rapidly the more Xbox pushes players to other devices, like with its “everything is an Xbox” campaign where Xbox titles can be streamed on other hardware from smart TVs to phones. Xbox has also started putting both new and old first-party games on rival systems like PlayStation and Switch.
However, Microsoft’s main desire is to continue grow Xbox Game Pass. Not making next-gen hardware at all would likely result in significant losses of Game Pass subscriptions, given that the primary user base of that subscription is on console. Then it would be stuck in a situation where Game Pass subscribers would be relegated to old consoles while other players moved on to PlayStation 6. Even if Game Pass is expanding its reach to other devices, Microsoft does not want to lose millions of current and potential console subs. So it is in a situation where it almost has to have a hardware option, even going into it knowing it is going to be wildly outsold by its competition.
One question is timeline, as from what Bond is saying it still sounds like pretty early days. The other is price, as Xbox Series X/S prices have skyrocketed to an almost comical degree, with $800 Series Xs costing more than a PS5 Pro now. Microsoft blames tariffs and the world economy, but its increases have been far higher than its competition, which has to be cratering sales further.
But yes, Microsoft is making next-gen hardware. When we see it, is another story.
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