Microsoft Corporation (MSFT.US) plans to release an Xbox handheld in 2027; next-generation console to launch in 2028 with a price possibly as high as $1,800

Microsoft Corporation (MSFT.US) is accelerating its layout of the next-generation gaming hardware matrix. According to reports, Microsoft Corporation plans to launch an Xbox handheld device in the 2027 holiday season and to launch its next-generation Xbox console, codenamed "Project Helix," in the 2028 holiday season. It is reported that the new gaming console, codenamed "Project Helix," will adopt AMD's (AMD.US) FSR 4.1 machine learning technology. Xbox CEO Asha Sharma described Project Helix as "a family of devices," hinting that Microsoft Corporation's future hardware ecosystem will no longer be limited to a single form factor. Combined with the "multi-year strategic partnership" that Microsoft Corporation and AMD reached last year, this family of devices is highly likely to be built on AMD's new chips. The report also stated that if Microsoft Corporation does not adopt a hardware subsidy policy, the next-generation console could be priced as high as $1,200 to $1,800. At the software development level, Microsoft Corporation's internal Windows team and Xbox team have previously disagreed over system leadership for the next-generation devices. Given that similar friction has occurred repeatedly between the two sides over the past 25 years, this conflict is not surprising. However, current reports indicate that the Xbox team has regained control of the software direction for the Project Helix project. In addition, Xbox's core subscription service Game Pass is also facing major adjustments. The report stated that Microsoft Corporation is reforming Game Pass in tiers by referencing the Netflix model, planning to offer multiple options with or without ads, and considering adding add-on service packages for console exclusives, cloud gaming, and multiplayer modes. This will enhance the flexibility of the service, but whether major day-one titles will be included in the subscription and how overall pricing will change remain unknown. One of Sharma's first moves after taking office was to correct Game Pass's pricing strategy. She acknowledged internally that "Game Pass is too expensive for players." Microsoft Corporation subsequently not only lowered the subscription price but also removed the new Call of Duty title from Game Pass's day-one lineup. In addition, Sharma plans to initiate a new round of Xbox layoffs this month, with more layoffs to be carried out in November and January. Under Sharma's leadership, the Xbox management team has been committed to improving the division's operating conditions and accelerating its growth. The division has about 14,000 employees but has suffered in recent years from extremely low profit margins and declining sales. In the fiscal year ended in June, Xbox's revenue fell 7% to $21.8 billion. According to disclosures by Microsoft Corporation earlier this year, the division's "accountable margin" (similar to adjusted profit margin) continued to decline over the past year and had fallen to just 3% as of June. Previously, Microsoft Corporation had hoped to create substantial new revenue by acquiring a large number of game studios, but the actual results did not meet expectations. Since taking over the division in February this year, Sharma has been committed to reversing its business decline. According to reports, in July she proposed a plan to cut 3,200 jobs (about 20% of the workforce) over the next year and to increase investment in game IP such as Halo and Minecraft. It is worth noting that, according to people familiar with the matter, in recent months several private equity investment institutions have considered the possibility of acquiring Microsoft Corporation's Xbox gaming business. If a deal were reached, the business could be valued at $100 billion to $150 billion. These people said such discussions by private equity firms were only at a preliminary exploratory stage and did not evolve into formal negotiations with Microsoft Corporation. Nevertheless, this also shows that if Microsoft Corporation makes unsatisfactory progress in turning around its struggling gaming business, the company may still be able to find a buyer. In response, a Microsoft Corporation spokesperson said in a statement: "Xbox is not for sale," and declined to comment further.