Xbox is in freefall, however Microsoft’s gaming platform might redeem itself as quickly as subsequent 12 months. Throughout AMD’s Q4 2025 earnings call on Tuesday, the chipmaker’s CEO, Lisa Su, stated that “improvement of Microsoft’s next-gen Xbox that includes an AMD semi-custom SoC is progressing effectively to assist a launch in 2027.”
Up till now, Xbox President Sarah Bond had solely been prepared to inform us the next Xbox console was certainly in improvement and would ship a “premium expertise.” The console possible received’t conform to anyone sport launcher. As an alternative, it might permit gamers to entry platforms like Steam, Epic Video games Retailer, and GOG in addition to Xbox. Basically, it will be a PC with a less-upgradable “semi-custom” AMD SoC (system on a chip).
Why is AMD speaking about this console even before Xbox can begin its next-gen media blitz? Possible as a result of gaming {hardware} shall be in the doldrums all all through 2026. Su stated the firm expects a “decline by a major double-digit share as we enter the seventh 12 months of what has been a really robust console cycle.”
2026 could also be an odd 12 months for gaming {hardware}
The 12 months will begin off with the launch of Valve’s long-awaited Steam Machine. Su stated the system will arrive early this 12 months, confirming what Valve had already indicated to Gizmodo and others about launch timing.
Valve’s PC/console hybrid will sport one other “semi-custom” AMD chip, although on this case it is going to be based mostly on older GPU microarchitecture, particularly RDNA 3.5. Valve has claimed it is going to be highly effective sufficient for 4K gaming with the assist of upscaling, although judging purely by specs, it might not be as powerful as graphics-obsessed avid gamers could demand. Later this 12 months, we may see new handheld gaming PCs sporting an Intel Panther Lake chip, however which may be it for brand new gaming {hardware}.
The problem shall be getting avid gamers excited for brand new gaming {hardware}, particularly if it prices something greater than the present technology of consoles. Greater than 5 years after launch, the PlayStation 5 and Xbox Series X cost more, not much less, due to final 12 months’s tariffs. A gaming-ready PC is now enormously costly due to the ongoing memory shortage. We still don’t know the price of the Steam Machine, however based mostly on Valve’s statements to this level, it possible received’t be low cost.
The following-gen Xbox could also be even costlier. Quite a few leaks from dependable sources like Moore’s Legislation is Useless on YouTube counsel that Microsoft’s PC-like console will use AMD’s newfangled RDNA 5 microarchitecture. The specs we’ve seen from leaks—together with GPU core counts—assist that this might certainly be a robust machine for taking part in video games at 4K with ray tracing enabled.
The trade could also be even worse off with out Xbox
Specs are one factor, however next-gen {hardware} success will rely on whether or not Microsoft can provide avid gamers an actual purpose to care. If consoles change into a “premium” system constructed just for the most-dedicated avid gamers with deep pockets, it would value out many extra potential gamers. Judging by Xbox’s reported slowdown in {hardware} and providers income, simply because they will’t afford a brand new console doesn’t imply gamers will run out to purchase an increasingly expensive Game Pass subscription. Xbox wants to supply avid gamers an entire new means to play, one thing that re-energizes Xbox as a way of life model, quite than simply one other producer of gaming {hardware}.
The gaming trade wants a win. A complete of 33% of U.S.-based sport builders who responded to the annual State of the Games Industry Report stated they had been laid off in the final two years. A lot of these had been due to Microsoft’s own cuts. Amongst its many in-house and partnered studios, Microsoft is answerable for main builders from Blizzard to Bethesda down to former indie darlings like Double High-quality and Obsidian. Xbox’s sluggish demise will make a foul time for the gaming trade worse.
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