Updated October 21: Included comment from Xbox CTO.
Microsoft's next-gen Xbox hardware lineup is beginning to come into focus. According to a new report from Fortune, the company is gearing up to ship new hardware in the form of a handheld in 2027, followed by a full-blown console in 2028.
It's unclear if the handheld project is a first party Xbox device, or a third-party device designed and manufactured by an OEM partner like ASUS and the ROG Ally X. The console is expected to be first-party, and is likely to run a specialized version of Windows.
The report claims that Xbox and Windows have been at odds about how the OS should run on Project Helix. Windows leaders wanted the consoles to run a modified version of Windows desktop, but Xbox leaders wanted a more boutique OS experience designed for gaming.
"Tensions ran high enough that a senior Xbox executive threatened to scrap the handheld project rather than adopt the Windows build ... Xbox is now largely controlling the direction of the operating system for the project" Fortune claims.
Microsoft's Xbox CTO, Scott Van Vliet has taken to X to refute Fortune's claims, stating that the report "misrepresents both the technical work and the relationship between the teams." But Windows and Xbox have a long history of clashing, and is the least surprising part of this report.
My own sources tell me that both Windows and Xbox teams have disagreed over the direction of the platform for certain gaming-specific experiences, but that doesn't mean the teams aren't still working together.
Windows already powers the current Xbox Series consoles, as well as Xbox One. It's a modified version of the OS that the Xbox team has customized, built on top of the Windows OS core that is developed by the Windows team.
It sounds like the Xbox team has decided to maintain this approach with Project Helix consoles, expanding and building upon it with new features and capabilities such as running PC games.
This is why you've seen an uptick in Xbox OS features for existing Xbox consoles over the last handful of months, as the Xbox org has started reinvesting in the OS experience they already control. This work will naturally also benefit the next-gen consoles.
Alarmingly, Fortune claims that Microsoft is currently expecting the next-gen Xbox console to cost somewhere between $1,200 and $1,800, making it the most expensive gaming console ever. It's possible that Microsoft may choose to subsidize the cost, which would bring it closer to $1,000, but nothing is confirmed.
Of course, these rumors are unconfirmed. Plans could change and schedules could slip, so nothing is set in stone until Microsoft is ready to formalize its plans officially. For now, we know that Project Helix is still in development, with first devkits expected to debut in early 2027.
Let us know in the comments what you think about Project Helix so far.
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