Microsoft is reportedly preparing to expand its gaming hardware lineup with a new handheld device and a next-generation console, according to a new report from Fortune. The company plans to release an Xbox handheld for the holiday season of 2027. The main console, codenamed Project Helix, is scheduled to follow in the holidays of 2028.
Xbox Project Helix Pricing and Hardware Strategy
The upcoming console faces significant production costs that could impact consumer pricing. Fortune reports that Microsoft is projecting the retail price for the next-generation Xbox to fall between $1,200 and $1,800. This high price tag assumes Microsoft does not subsidize the hardware costs to keep the device affordable for the average gamer.
Xbox CEO Asha Sharma has described Project Helix as a “family of devices,” suggesting the release will not be limited to a single traditional console unit. This strategy aligns with Microsoft’s recent move into handheld gaming. The company previously partnered with Asus to release the Xbox Ally, a device running a modified version of Windows 11 with a dedicated Xbox mode.
It remains unclear whether Microsoft will manufacture the 2027 handheld internally or continue to rely on external partners like Asus. The company announced a strategic multi-year partnership with AMD last year to develop a portfolio of devices. This collaboration is expected to power the next generation of Xbox hardware with AMD’s latest chips.
Internal Conflicts and Game Pass Overhaul
Development of the new hardware has been accompanied by internal restructuring and software disputes. Reports indicate that Microsoft’s Windows and Xbox teams have clashed over the software architecture for the next-gen console. Despite these historical tensions dating back 25 years, Xbox appears to be taking control of the software direction for Project Helix.
Sharma is also planning to restructure the Xbox Game Pass subscription service. The company is exploring a tiered model similar to streaming services like Netflix, which could include options with or without advertisements. The overhaul may introduce add-ons for console-only games, cloud gaming features, and multiplayer access.
These changes follow recent adjustments to the subscription service. Earlier this year, Sharma reversed previous price hikes after acknowledging internally that Game Pass had become too expensive for players. The company also removed day-one access to future Call of Duty titles from the standard subscription tier.
Workforce reductions are also part of the current operational shift. Fortune reports that Sharma intends to conduct a fresh round of layoffs this month, with additional cuts scheduled for November and January. These personnel changes coincide with the development timeline for the new hardware and the restructuring of the Game Pass ecosystem.
Source: The Verge
