Microsoft confirms next-gen Xbox console is in the works, and it’s about to get pricier

Xbox President Sarah Bond has confirmed what gamers have long suspected; Microsoft’s next-generation console is officially in development. Speaking to Variety, Bond revealed that design and prototyping are already underway, offering the first concrete signal that the Xbox team is gearing up for its next major leap.

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While details are sparse, Bond did confirm that AMD would be a key partner. Microsoft is reportedly collaborating with the chipmaker on a new system-on-chip design, and leaks suggest it could be the largest APU AMD has ever produced for a console. Early whispers claim this powerhouse could outmuscle Sony’s yet-to-be-announced PlayStation 6, though both will likely share AMD DNA under the hood.

More than just one Xbox

Bond’s comments also hinted at a broader hardware vision. “We have our next-gen hardware in development”, she said, before teasing that Xbox plans to “bring gamers another choice”.

That line has fuelled speculation about an Xbox-branded handheld; especially after Microsoft’s collaboration with ASUS on the ROG Xbox Ally and reports of an internal portable project that was shelved due to AMD’s steep production requirements.

If a new handheld is indeed on the horizon, it would enter a crowded but fast-growing space led by Nintendo’s Switch 2 and Valve’s Steam Deck OLED.

For now, Xbox’s bigger challenge lies in balancing its hardware ambitions with its service-first identity. The company recently celebrated record revenue for Xbox Game Pass in fiscal 2024, even as hardware revenue dipped 22 per cent. Add to that a wave of price increases across both consoles and subscriptions, and Microsoft faces the difficult task of convincing gamers that the next Xbox will be worth the wait, and the price tag.

Whatever form it takes, the next Xbox will say a lot about how Microsoft plans to stay relevant in an era where gaming isn’t just about graphics, but ecosystems.