Microsoft confirms next-gen Xbox hardware is in the works, teases first-party handhelds

[DragonSlayer101]

The takeaway: Xbox President Sarah Bond has confirmed that Microsoft is actively developing next-generation Xbox consoles, putting to rest rumors that the company might exit the market. Bond also addressed the high pricing of the new Xbox Ally handhelds and revealed that Microsoft is seriously considering producing its own gaming handhelds in the future.

In an interview with Variety, Bond categorically denied rumors that Microsoft is exiting the console market. She told the publication that "our next-gen hardware (is) in development," noting that the devices are currently in the design and prototyping stages.

Bond reassured Xbox gamers that Microsoft's partnership with AMD remains active and described the company's collaboration with Asus on the Xbox Ally devices as an opportunity to offer gamers another handheld option "in addition to our next-gen hardware."

When asked about the high pricing of the Xbox Ally and Xbox Ally X – which retail for $600 and $1,000, respectively – Bond explained that they are essentially Asus products, with pricing determined by the Taiwanese firm. She did not elaborate further, though industry sources cited by Windows Central suggest that elevated tariffs on Chinese imports contributed significantly to the higher costs.

The interview comes just days after Microsoft initially denied rumors that it was exiting the console market. In a press release, the company clarified that it is "actively investing in our future first-party consoles and devices designed, engineered and built by Xbox."

Bond's statement should reassure Xbox fans who were concerned following the cancellation rumors, especially as the company has already shelved the cloud-based Keystone console and a first-party Xbox handheld over the past year.

Microsoft's gaming division has faced criticism recently for several reasons, including the decision to raise the Xbox Game Pass Ultimate subscription by 50 percent, from $19.99 to $29.99 per month. Following the price hike, gamers have reportedly been canceling their subscriptions in record numbers, raising fears of a potential mass exodus from Xbox that could impact Microsoft's bottom line.

The ROG Xbox Ally handhelds were released last week to generally favorable reviews, praised for their strong performance, improved battery life, excellent ergonomics, and a more intuitive user interface compared to other handheld gaming PCs. However, they were criticized for their high price tags and the lack of basic features such as an OLED display, touchpads, and Hall effect joysticks.

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Microsoft confirms next-gen Xbox hardware is in the works, teases first-party handhelds

 

[m4a4]

Well, yeah. Software sales on other platforms more than make up for the (lack of) hardware sales. If anything, they won't really need to subsidize them much (if at all). Just means they're sticking with not locking consumers into their walled garden.

Their next console will probably be the closest to a small form factor PC yet (as a console is for convenience over a "complex" desktop experience). And I see it as a good thing for consumer choice.

Edit: Apparently talking about consoles wasn't context enough...

 

[Theinsanegamer]

Well, yeah. Software sales on other platforms more than make up for the (lack of) hardware sales. If anything, they won't really need to subsidize them much (if at all). Just means they're sticking with not locking consumers into their walled garden.

The next one will probably be the closest to a small form factor PC yet (going for convenience over a "complex" desktop experience). And I see it as a good thing for consumer choice.

That's not how that works. More consumers going to other platforms means the xbox will need MORE subsidies, not less, to remain price competitive, because software sales are the meat and potatoes of a console maker.

Not that those sales could be used for that anyway. Sure, gamepass is profitable, but Activision, one of the largest publishers on Gamepass, lost $1.3 billion last year. Sales of Bethesda and Machine games titles are dropping too.

I doubt Microsoft will be willing to sell a mini PC at a significant loss just to spread the name of "xbox" to such a niche market. That niche has been tried before, multiple times, and it has failed every time.

 

[NumberNine]

That's a great looking handheld, too bad they want to ruin it by running Windows on it.

 

[m4a4]

That's not how that works. More consumers going to other platforms means the xbox will need MORE subsidies, not less, to remain price competitive, because software sales are the meat and potatoes of a console maker.

More revenue from other Xbox software sales on other platforms means *gasp* more revenue. Which puts far less a burden on the hardware selling in high enough numbers to sell enough software...

Seems you don't get how multi-platform works (just like Sony).

Not that those sales could be used for that anyway. Sure, gamepass is profitable, but Activision, one of the largest publishers on Gamepass, lost $1.3 billion last year. Sales of Bethesda and Machine games titles are dropping too.

Oh, so you do admit that gamepass is profitable. Your tune before was that despite what Xbox said, it wasn't (based on nothing substantial).
And they just bought Activision. Your point?
Yeah, they've put out some bad titles recently. Has nothing to do with their hardware

I doubt Microsoft will be willing to sell a mini PC at a significant loss just to spread the name of "xbox" to such a niche market. That niche has been tried before, multiple times, and it has failed every time.

Where did I say that they were going to instead go to a mini PC?

 

[lorac]

Uh, the revenue from selling games on rival platforms is sustaining the loss from putting the games on game pass which doesn't generate anything close to the cost of all the studios Microsoft now owns as well as the massive loss from CoD microtransactions as subscription holders do not buy those at even a fraction the rate people did when they purchased the games outright.

People need to come to grips with the reality that xbox is losing money, and game pass does not generate the revenue needed to support the games being put on it. That's why they have to put their games on PlayStation/Nintendo while closing studios firing thousands of people and raising prices dramatically.

 

[Theinsanegamer]

More revenue from other Xbox software sales on other platforms means *gasp* more revenue. Which puts far less a burden on the hardware selling in high enough numbers to sell enough software...

Seems you don't get how multi-platform works (just like Sony).

More sales on other platforms means *gasp* less sales on their own hardware. Which puts a greater burden on the hardware selling to recoup their development costs.....

Seems you dont get how console sales work (just like Microsoft).

Oh, so you do admit that gamepass is profitable. Your tune before was that despite what Xbox said, it wasn't (based on nothing substantial).

My argument was, and sit down this might be a lot for you to take in, that Game Pass was not profitable on its own. It was only "profitable" by siphoning the income from other companies. People signed up to Gamepass to get CoD cheap for a month or 2, great for Game pass income, but hammers Activision hard with lose revenue.

Lying through half-truths is the best form of propaganda. They claimed GamePass is "profitable" and generated over $5 billion in revenue. What they DIDNT say was how profitable it actually was. That $5 billion doesnt account for ANY costs associated with running GamePass, or the losses from their other gaming divisions that are part of xbox.

GamePass revenue is a net zero game in regards to MS developers. If activision, bethesda, et al are loosing money, but gamepass is making money (but not enough to cover the losses) then the whole kit is not profitable.

And they just bought Activision. Your point?

They bought activision 2 years ago bud. It's not a new deal, the ink has long dried, and we can see the effect: they lost over $1.3 billion last year alone, and this year is looking to be worse.

"The Point" is that all that "profit" from gamepass also has to account for cratering sales of MS's own studios, whose games are on gamepass day 1 significantly undermining sales. That means you need to use GP revenue to keep those studios open. That makes GP's numbers look far less appealing.

Yeah, they've put out some bad titles recently. Has nothing to do with their hardware

Correct, those bad studios are not caused by hardware. However, those first party titles are the ONLY reason to buy an xbox, so their failures inevitably mean worse sales of the console, and as a result, worst losses per unit because you have fewer units to amortize R+D and maintenance costs with.

Where did I say that they were going to instead go to a mini PC?

"Their next console will probably be the closest to a small form factor PC yet (as a console is for convenience over a "complex" desktop experience)."

Consoles are already smaller then most PCs and already use PC hardware, so the only way they would be closer to a small form factor PC would be if they were more like PCs, as in, freedom to install software outside the xbox library. They've already started that process, developer mode on xbox is freely available now and allows you to install all sorts of stuff, and the xbox rog ally literally runs windows like any other handheld.

Context. They're clearly chasing a more hybrid PC approach with much more expensive hardware, and that historically has never worked. MS isnt going to be selling many $1500 xbox 720XDs compared to a $600 PS6, and gamepass growth has stalled for months now, and it doesnt make enough money to offset their developer losses.

 

[Scshadow]

Good luck on the new console. I feel like very few people have come out of this current console generation feeling like they've gotten good value on their upgrade. I think next-gen is going to very much lack any hype to it. Hopefully gaming as an industry gets a course correction. Although its probably in a death spiral. Poor sales may lead to higher prices to compensate which leads to lower sales and even higher prices until everyone just quits.

 

[m4a4]

More sales on other platforms means *gasp* less sales on their own hardware. Which puts a greater burden on the hardware selling to recoup their development costs.....

They don't NEED hardware sales when they have the same software available on other platforms. And since there is no console war, why would they put much effort into the R&D? They can just casually release a console IF people want it.

It's comical that you keep thinking that they need their hardware to beat Sony's numbers.

My argument was, and sit down this might be a lot for you to take in, that Game Pass was not profitable on its own. It was only "profitable" by siphoning the income from other companies. People signed up to Gamepass to get CoD cheap for a month or 2, great for Game pass income, but hammers Activision hard with lose revenue.

Lying through half-truths is the best form of propaganda. They claimed GamePass is "profitable" and generated over $5 billion in revenue. What they DIDNT say was how profitable it actually was. That $5 billion doesnt account for ANY costs associated with running GamePass, or the losses from their other gaming divisions that are part of xbox.

GamePass revenue is a net zero game in regards to MS developers. If activision, bethesda, et al are loosing money, but gamepass is making money (but not enough to cover the losses) then the whole kit is not profitable.

So you still don't have anything to actually go on. Got it.

They bought activision 2 years ago bud. It's not a new deal, the ink has long dried, and we can see the effect: they lost over $1.3 billion last year alone, and this year is looking to be worse.

"The Point" is that all that "profit" from gamepass also has to account for cratering sales of MS's own studios, whose games are on gamepass day 1 significantly undermining sales. That means you need to use GP revenue to keep those studios open. That makes GP's numbers look far less appealing.

If you think corporate restructuring and video games are quickly made in 2 year, boy, do you need to rethink your argument there.

And yeah, that has nothing to do with hardware sales. The point is still moot.

Correct, those bad studios are not caused by hardware. However, those first party titles are the ONLY reason to buy an xbox, so their failures inevitably mean worse sales of the console, and as a result, worst losses per unit because you have fewer units to amortize R+D and maintenance costs with.

They can be bought on other platforms. Another moot point because you don't seem to comprehend that.

"Their next console will probably be the closest to a small form factor PC yet (as a console is for convenience over a "complex" desktop experience)."

Consoles are already smaller then most PCs and already use PC hardware, so the only way they would be closer to a small form factor PC would be if they were more like PCs, as in, freedom to install software outside the xbox library. They've already started that process, developer mode on xbox is freely available now and allows you to install all sorts of stuff, and the xbox rog ally literally runs windows like any other handheld.

Context. They're clearly chasing a more hybrid PC approach with much more expensive hardware, and that historically has never worked. MS isnt going to be selling many $1500 xbox 720XDs compared to a $600 PS6, and gamepass growth has stalled for months now, and it doesnt make enough money to offset their developer losses.

As in, I didn't. "Closest" ≠ "it won't be a console anymore".

Considering how much custom hardware goes into a console, I'm saying there will be less R&D to make it look prettier than the box they already have gone with. Heck, they haven't even done a mid-cycle refresh with denser hardware (like other generations). What does that tell you? (hint: they aren't taking it very seriously as hardware sales aren't important like they used to be)

 

[m4a4]

People need to come to grips with the reality that xbox is losing money, and game pass does not generate the revenue needed to support the games being put on it. That's why they have to put their games on PlayStation/Nintendo while closing studios firing thousands of people and raising prices dramatically.

Based on what? Gaming revenue numbers that you've made up in your head?

 

[Watzupken]

All that’s left of Xbox is just the name. When Microsoft opened their game to all platforms, they basically killed the need for the Xbox console.

 

[texasrattler]

All that’s left of Xbox is just the name. When Microsoft opened their game to all platforms, they basically killed the need for the Xbox console.

MS focus hasn't been on hardware for a long time. Yes they make a console but it's not have to like Sony. They make one cause they can.
MS goal/aim has and will always be software/services. Always.