Microsoft Reassures Investors: Xbox Hardware Progress Continues Amidst Exit Rumors
Following a period of intense speculation, Microsoft has directly affirmed its commitment to developing and manufacturing Xbox hardware. The clarification came Sunday as the company addressed concerns sparked by rumors suggesting a potential exit from the console market.
“We actively invest in our future first party consoles and devices designed, developed and built by Xbox,” Microsoft stated, directly countering recent reports. The company also highlighted a strategic partnership with AMD, solidified in June 2025, focused on developing custom chips for a “portfolio of devices, including our next Xbox generation.”
Xbox President Sarah Bond previously outlined a broader hardware strategy encompassing ”Console, handheld, PC, cloud and accessories,” signaling a move beyond a singular focus on customary living room consoles.
This commitment to hardware is demonstrated by Microsoft’s collaboration with Asus on the ROG Ally handheld. The premium ROG Ally X model, priced at $999.99,is slated for release on October 16th and features an AMD Ryzen Z2 Extreme processor,effectively bridging the gap between PC and console gaming. Notably, the device’s Windows-based operating system allows for compatibility with playstation Studios software.
Beyond processing power,the AMD partnership aims to leverage Artificial Intelligence (AI) for “Immersive Gameplay experiences,” including AI-powered graphics enhancements like intelligent upscaling and frame generation. Microsoft is also developing AI-driven tools for game developers, including an “AI design copilot” for generating scripts and dialog, and an “AI Character engine” for dynamic, real-time storytelling.
The surge in rumors regarding a potential Xbox hardware exit stemmed from growing pressure on the platform. While Game Pass, currently priced at $360 annually, was once considered a key advantage, the cost is increasingly scrutinized due to the inclusion of high-budget titles like Call of Duty, which impact direct sales revenue. Microsoft’s shift towards multi-platform publishing, exemplified by the planned release of Indiana Jones and the great circle on PlayStation 5, further fueled concerns about the value proposition of owning an Xbox console.
Microsoft’s public reaffirmation of its hardware commitment will be closely monitored, with the launch of the ROG Ally handheld serving as an initial test. The AMD partnership points towards a potential next-generation console, possibly arriving as early as 2026. Phil Spencer,head of Xbox,has acknowledged the limited differentiation between current consoles,stating the next Xbox should “be innovative and make the hardware a differentiation feature.”
