Phil Spencer says next-gen Xbox is first-party — the Xbox Ally hints at what’s next

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Xbox has faced some challenges recently, with criticism surrounding Game Pass price increases and studio closures. In a new interview with Famitsu, Phil Spencer addressed these issues and discussed the future of Xbox, including plans for games like Halo and Kojima’s OD, as well as the next generation of Xbox consoles.

Xbox president Sarah Bond recently hinted to Mashable that the next Xbox will offer a top-quality, carefully selected gaming experience. Now, Phil Spencer has confirmed that Xbox will continue making consoles, and a new one is currently in development. This should reassure fans who were concerned Microsoft might stop producing Xbox hardware.

Following concerns from fans about Xbox consoles disappearing from stores like Target and Walmart, and rumors about Xbox leaving the hardware market, Phil Spencer recently gave an interview with Famitsu to address these issues and talk about the future of Xbox consoles and games.

In the interview, he confirmed that the next Xbox will be a first-party Microsoft product, saying:

The hardware that we Microsoft will announce as the first party will be the next console.

Phil Spencer- Executive Vice President, Gaming at Microsoft

Phil stated they haven’t decided on a release date, but given that Xbox consoles usually last about seven years, a launch around 2027 or 2028 seems likely if that trend holds.

Phil hinted at future plans, mentioning the ROG Xbox Ally—a new handheld gaming device created with ASUS—as an indication of the direction they’re taking.

This product gives us a glimpse into the future of the Xbox platform and how it will bring all devices together in a connected ecosystem.

Phil Spencer- Executive Vice President, Gaming at Microsoft

This suggests the next Xbox might combine elements of a traditional console with the flexibility of a PC, running the Xbox interface on Windows. Many gamers would likely appreciate this, as it would allow them to play their existing Xbox games on their computers. This approach aligns well with Xbox’s goal of letting players access their games, progress, and saved data on any device.

The profit pressure behind Xbox’s future

A new report by Jason Schreier indicates that Microsoft is pushing Xbox to achieve a 30% profit margin – a notably high goal for the gaming world. Most console companies, like Nintendo and Sony, usually aim for profit margins between 10% and 20%.

To achieve those financial goals, Xbox essentially has two choices: cut costs or raise prices. We’re already seeing this happen with Game Pass becoming more expensive, and it’s likely new games will soon cost $80.

As a fan, it’s becoming clearer why we’re seeing so many studios shut down and games get canceled. It all comes down to money, really. Microsoft needs to keep Xbox profitable, and honestly, putting their games on PlayStation seems like a pretty easy way to do that – it helps cover those increasing development costs. It’s a bit sad to see, but I get why they’re doing it.

For a more thorough explanation of this subject, I recommend reading the complete article by Jez Corden. He goes into much greater detail.

What it all means for Xbox players

Based on comments from Sarah Bond and Phil Spencer, Xbox appears to be moving beyond traditional console generations. They’re prioritizing connecting devices, creating high-quality hardware, and making it easy to play games on any screen.

It’s a bold plan, and I’m optimistic if console makers can offer cheaper models alongside a powerful, high-end Xbox. My worry is whether the costs will make it difficult. Unlike previous Xbox generations, the next console might actually turn a profit, because traditional game sales alone might not be enough to offset the costs – especially if players can buy games from stores like Steam on the Xbox.

If the new Xbox has good technical specs and doesn’t cost more than $1,000, it’s something I’d seriously consider. Upgrading my current gaming PC with a GTX 1080 would be much more expensive than that to get everything up to date, so an Xbox that can also play games well would be a smart choice.

This feels like a critical turning point for Xbox. While some may think the opportunity has already slipped away, I’m still invested in the brand and will be watching closely – with a mix of caution and optimism – to see how it moves forward.

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2025-10-24 13:10