Xbox President Sarah Bond has revealed that the next generation of hardware is already in development. What is the significance of these announcements and what could they mean?
These days, Xbox stands for one thing above all else: steep prices. After an increase in Game Pass costs at the beginning of October led to a wave of cancellations that crippled the corresponding website, the first Xbox handhelds were released a few days ago: ROG Xbox Ally and ROG Xbox Ally X – for around $600 and $1,000, respectively.
At the same time, Microsoft is already working on the next generation of the console, as Xbox President Sarah Bond confirmed during a launch event for the current handhelds. “Our next-generation hardware is in development. We’ve been working on prototypes and design,” she is quoted as saying by Variety.
New Xbox a half-baked gaming PC?
Bond has high expectations for the upcoming hardware. In an interview with Mashable, she did not dismiss rumors that it could be a kind of middle ground between a gaming PC and a classic console: “I can tell you that you are right: the next-generation console will offer a very high-quality, very exclusive experience. You can already see some of our ideas in the handheld consoles,“ said Bond, who ”doesn’t want to reveal everything yet.”
But what is the truth behind Bond’s statements? And what could these ideas mean in terms of price?
Less than a year ago, Xbox was promoting the idea that virtually any device could be an Xbox. Shortly before that, a partnership with LG and Samsung had made it possible to play games on smart TVs, smartphones, and in some cars. Microsoft also acquired numerous studios, but decided not to release several prominent exclusive titles, making them available on Sony’s PlayStation, for example. This was a sign of a shift away from proprietary hardware toward cloud gaming and service offerings.
Console as a loss-making business: Is Microsoft pulling out?
This trend is also underlined by the current handhelds. After all, these are not Xbox’s own products, which had been rumored for a long time, but a collaboration with Asus. Even before the Xbox version, their Ally was already an established part of the mobile gaming market.
The main reason for this development is likely to be the fact that consoles are generally a loss-making business for manufacturers: gamers are attracted by low prices, with the aim of then generating profits through game sales, subscription services, and offers in the respective console store.
The financial tipping point
With regard to the upcoming Xbox, the price will therefore depend crucially on how much of the console is actually manufactured by Microsoft itself. If the company takes complete control of the project, there is a possibility that it will go down the loss-making route.
If a similar collaboration with Asus were to take place, the cost of a new purchase could reach new heights. As with the handhelds manufactured by Asus, which must generate a profit for the hardware developer with every sale. After all, without any profit sharing from game sales and the like, there are no subsequent earning opportunities for the developer.
