Microsoft is reportedly planning to launch its next-generation Xbox console in late 2028, but gamers may have to pay a hefty price to get their hands on it. According to a report by Fortune, the tech giant internally estimates that the upcoming console could cost between $1,200 and $1,800 unless the company decides to subsidise its price. Notably, the current Xbox console prices were hiked in the United States by Microsoft from August 1, 2026, by $100 for 512GB models and $150 for 1TB models.
The report also suggests that Microsoft plans to release a next-generation handheld gaming device during the 2027 holiday season, followed by its next Xbox console during the 2028 holiday season.
According to Fortune, Xbox CEO Asha Sharma is working closely with designers on the company's next-generation gaming hardware, internally known as Project Helix.
"Inside the company’s secretive lab, known as Building 87 on campus, she has been plotting with lead designers such as Carl Ledbetter about the next-gen Project Helix hardware that could get gamers to stick with Xbox for mobile play, tinkering in regular stand-up meetings over prototypes and which strategic partnerships might help Xbox evolve," Fortune reported.
The reported price range of $1,200 to $1,800 would make the upcoming Xbox significantly more expensive than existing consoles. However, the final retail price could be lower if Microsoft decides to subsidise the hardware.
Under the proposed system, subscribers could choose specific features based on their needs. These could include add-ons for console-only games, cloud gaming and multiplayer access. The service would reportedly operate under a tiered pricing structure, according to people familiar with the company's plans.
An internal report reportedly found that Game Pass helped Microsoft build its subscription business but also affected sales of its higher-priced first-party games, particularly during their launch periods.
Former employees told Fortune that conflicting performance metrics across teams, such as subscription revenue and game store revenue, further complicated the company's strategy.
In a July memo titled "Resetting Xbox," Sharma reportedly said that the gaming business was operating at profit margins three to ten times lower than those of comparable platform and publishing businesses.
Sharma also acknowledged that Xbox had aggressively expanded its portfolio of gaming studios since 2018. However, she said the business had become overextended and needed to focus its investments.
Microsoft has not released a new generation Xbox console since 2020 reportedly due to soaring hardware manufacturing costs, global RAM and component shortages. If launched, the new console will be the first in eight years after the Xbox Series S and X. Notably, prices of the current consoles have jumped over 60 per cent in the last eight years. Even Game Pass prices have jumped more than 50 percent since initial launch.
The report also suggests that Microsoft plans to release a next-generation handheld gaming device during the 2027 holiday season, followed by its next Xbox console during the 2028 holiday season.
According to Fortune, Xbox CEO Asha Sharma is working closely with designers on the company's next-generation gaming hardware, internally known as Project Helix.
"Inside the company’s secretive lab, known as Building 87 on campus, she has been plotting with lead designers such as Carl Ledbetter about the next-gen Project Helix hardware that could get gamers to stick with Xbox for mobile play, tinkering in regular stand-up meetings over prototypes and which strategic partnerships might help Xbox evolve," Fortune reported.
The reported price range of $1,200 to $1,800 would make the upcoming Xbox significantly more expensive than existing consoles. However, the final retail price could be lower if Microsoft decides to subsidise the hardware.
Microsoft planning major overhaul of Xbox Game Pass
The report also claims that Microsoft is considering a major restructuring of Xbox Game Pass, its subscription-based gaming service.Under the proposed system, subscribers could choose specific features based on their needs. These could include add-ons for console-only games, cloud gaming and multiplayer access. The service would reportedly operate under a tiered pricing structure, according to people familiar with the company's plans.
An internal report reportedly found that Game Pass helped Microsoft build its subscription business but also affected sales of its higher-priced first-party games, particularly during their launch periods.
Former employees told Fortune that conflicting performance metrics across teams, such as subscription revenue and game store revenue, further complicated the company's strategy.
Microsoft's woes
Microsoft has cut thousands of jobs this year as part of efforts to restructure its Xbox business.In a July memo titled "Resetting Xbox," Sharma reportedly said that the gaming business was operating at profit margins three to ten times lower than those of comparable platform and publishing businesses.
Sharma also acknowledged that Xbox had aggressively expanded its portfolio of gaming studios since 2018. However, she said the business had become overextended and needed to focus its investments.
Microsoft has not released a new generation Xbox console since 2020 reportedly due to soaring hardware manufacturing costs, global RAM and component shortages. If launched, the new console will be the first in eight years after the Xbox Series S and X. Notably, prices of the current consoles have jumped over 60 per cent in the last eight years. Even Game Pass prices have jumped more than 50 percent since initial launch.