Microsoft's future Xbox hardware plans, including a potential next-generation console and a handheld device, have been detailed in a new report, with a significant takeaway being the projected high cost of the console.
According to Fortune, the console, referred to as Project Helix, could carry a price of $1,200 to $1,800, unless Microsoft decides to subsidize the cost. The system is reportedly slated for a 2028 release. Historically, console manufacturers have often absorbed some of the initial hardware cost, recouping expenses through software and services. For instance, then-Xbox CEO Phil Spencer revealed that Microsoft incurred losses of up to $200 per unit sold for the Xbox Series X and S at their 2020 launch.
The escalating cost of new consoles may be influenced by ongoing shortages of components and memory, exacerbated by the rapid growth of AI technology. Microsoft's significant investment in AI development is noted as a contributing factor to an environment where next-generation consoles could become exceptionally expensive. Xbox CEO Asha Sharma has commented on this irony, acknowledging the value of GPUs beyond gaming.
The report also suggests that Microsoft might introduce a "next-generation handheld device" for Xbox by the end of 2027, though specific details regarding pricing or features remain undisclosed. Project Helix is described as encompassing a "family of devices," which would logically include both console and handheld offerings.
Internal disagreements reportedly arose between the Xbox and Windows teams regarding the software for Project Helix. The Windows team advocated for a streamlined version of Windows Home on the handheld, while the Xbox team pushed for a dedicated, custom-built operating system. An unnamed senior Xbox executive allegedly threatened to halt the handheld project rather than adopt the Windows platform. Currently, Xbox appears to be leading the direction of the handheld's OS, though Sharma stated that the teams collaborate, emphasizing that "We can't build Helix on our own."
Sharma, who took over as Xbox CEO in February, has previously described the company's state as unhealthy and has initiated significant changes, including layoffs, studio closures, and game cancellations. The report indicates that the layoffs, which have already affected approximately 2,000 employees, are ongoing, with further reductions expected in November and January 2027. Major organizational shifts have also occurred, such as transferring the Halo franchise management to Activision.