The next-gen Xbox won’t cost you $1,800. It can’t. Can it?

My archetypal reaction: The next Xbox is deceased on arrival. It’s DOA.

My second thought: Microsoft knows group won’t pay that much. It couldn’t perchance accusation that much prosperity if it wants next gen to be a success. “I wouldn’t publish it at all,” erstwhile Microsoft exec Mike Ybarra recently said.

My third thought: Didn’t Microsoft already say out loud that it knows group won’t pay that much?

Did Fortune get it wrong?

I don’t think Fortune’s insiders are the issue here. With today’s incredibly overpriced RAM and storage, it wouldn’t be amazing if it disbursal complete a thousand dollars to build, package, distribute, and market “the largest specialized jump you volition have always seen in a hardware generation,” as erstwhile Xbox chairman Sarah Bond called the next Xbox rear in 2024.

But there are at smallest five ways the study could be accurate without making you pay all that prosperity at once. I fair don’t think you’re going to akin most of them.

The least-likely possible is the one Fortune suggests itself. Let’s appearance at the first quote, bolding mine:

Historically, Microsoft has subsidized the Xbox. Microsoft sold boxes at a defeat correct out of the gate, making its profits whenever you buy games and Xbox Game Pass subscriptions alternatively of on the hardware alone. That’s not our speculation — it’s exactly what Microsoft told The Verge in 2021. In 2023, we learned that Microsoft may have spent $1.5 billion to create certain it could market the Xbox Series X and S at $499 and $299 respectively, alternatively of what they really cost.

But Microsoft has suggested that it’s done alongside hardware subsidies. “Going forward, this cannot continue,” wrote Sharma in her “Xbox reset” memo, referring to the $20 milliard in content, platform, and hardware subsidies Microsoft made complete the former five years.

Microsoft CEO Satya Nadella echoed that idea on the Hard Fork podcast: “No one can accusation Microsoft of not having invested for the final 25 years, and now we have to rotate this into a sustainable business.”

It isn’t fair new administration that’s hinting at no additional subsidies: Bond primed the pump for a $1,000 box whenever she called Helix “a extremely premium, extremely high-end curated experience” late final year, comparing it to gaming PCs akin the $1,000 Xbox Ally X handheld.

Perhaps Microsoft has changed its intellect since then. “We are operating extremely difficult to rethink everything that we can concerning Helix,” Ball stated in June, referring to affordability. “The plan’s the scheme until it’s not the plan,” Sharma stated in February (though not concerning affordability specifically).

But subsidies would be a enormous hazard if the Helix motionless plays PC games in supplement to Xbox ones. Valve’s Steam is by far the foremost PC gaming phase — so PC gamers who buy a Helix won’t assistance Microsoft recoup its money.

There’s another way Microsoft could subsidize a $1,200 Xbox.

Today, AT&T volition provision you a $1,200 iPhone 18 Pro for $0* — if you fastener yourself into 36 months of AT&T phone assistance that expenses $100 or additional per duration and commerce in a latest phone, too.

Microsoft could do the identical alongside a new, pricier tier of its Xbox Game Pass equivalent subscription service, efficiently bundling the games alongside the console and making you gradually pay for the two at the identical time. Perhaps you’ll have the option to buy an “unlocked” Xbox for complete price, but it won’t be the norm.

To create it happen directly, Microsoft would need a pricier new tier of Xbox Game Pass, which wouldn’t necessarily align alongside the company’s latest moves. Sharma really cut the cost of Game Pass Ultimate to $22.99 a duration in April, penning that “Game Pass has rotate into too costly for players,” during removing Call of Duty games and unlimited admission to Xbox Cloud Gaming from the deal.

I don’t cognize if it would work. People awareness naked leaving the home without phone service. They power not awareness the identical concerning games. Subscription fatigue is real. But if it worked, Microsoft’s moat would be stronger than ever. You’ll be additional apt to perform the games you’ve already paid for and are committed to keep paying for. Many would get sucked into a profitable upgrade cycle, fair akin they do alongside phones, since they can buy the next Xbox for “$0” as shortly as it comes out.

Cellphone subsidies have been about nearly as lengthy as pricey phones: The 1994 IBM Simon, arguably the archetypal smartphone, eventually disbursal fractional its $1,100 cost tag if you signed a agreement alongside BellSouth. My archetypal phone, a Kyocera QCP-6035 alongside a built-in PalmPilot, was subsidized whenever it arrived in 2001. So it’s not exactly a “radical new endeavor model,” but it would be new for equivalent consoles.

It’s additionally imaginable that Microsoft merely doesn’t scheme to market a console to the masses anymore — it can market an $1,800 Xbox to those who can oversee “video equivalent ownership” and try to hook everyone alternatively on the Netflix model.

After all, the “K-shaped economy” and RAMageddon have already made gaming PCs and existing equivalent consoles into luxury goods. Society’s wealthier individuals appear absolutely blessed to pay inflated prices for the few consoles Sony and Microsoft motionless pump out.

“I can inform you definitively, petition for our console exceeds supply. We are putting them in as many stores as possible, we are producing them as quickly as possible. There is a serious limitation to how quickly we can do that,” Xbox chief scheme authoritative Matthew Ball told The Game Business in June, blaming RAM shortages.

But Microsoft has another way of giving small affluent group admission to “next-gen” Xbox power. It can rent you one. The business fair launched pay-as-you-go haze gaming starting at $3.99 for 10 hours of haze gaming (50 hours for $11.99).

Maybe all of Microsoft’s latest conversation concerning affordability isn’t concerning the masses owning a next-gen console. Maybe it’s concerning finding an affordable way for group to “play Xbox” without owning the games at all.

After Fortune’s report, several of the extremely archetypal reactions I saw boiled downward to this: “I’m out. Forget next gen, I’m going to rod alongside my existing Xbox/PlayStation/Switch.”

That’ll be the actuality for many group if the Xbox expenses complete a thousand bucks. But if the RAM deficit continues — if Microsoft knows it’ll market all Xbox it can create to affluent individuals since it can’t create a lot — it’s not necessarily a huge hazard to market it sky-high on day one.

Perhaps the Xbox Helix volition be an first adopter console, the identical way the iPhone Duo is an first adopter phone, the identical way the Steam Frame is an first adopter headset. These products are marketing out immediately notwithstanding their elevated cost tags, leaving many would-be buyers in the cold. They’re shipping messy and unfinished, but that’s fine since first adopters desire to arrive alongside for the ride.

Microsoft knows the identical is true of several Xbox buyers, since it helped container an unfinished $1,000 Xbox Ally X handheld equal before the RAM crisis, and the $1,300 Xbox Ally X20 follow-up is already sold out.

But if Microsoft splits the Xbox spectators into “have” and “have-not,” it method the next generation won’t really arrive. Game developers won’t expend all their attempt targeting a console group can’t buy. The next Xbox won’t be any additional necessary than a PS5 Pro if you already own a PS5. In industry lingo, the Helix would be a “mid-cycle refresh” alternatively of true next gen.

I wouldn’t dislike that, though, and neither would many video equivalent execs. They’ve lengthy complained that the gait of innovation has ballooned the disbursal of construction a video equivalent to unsustainable levels, foremost to today’s earth anywhere too many betterment teams are cut to the skeletal correct following their games ship.

Former PlayStation and Xbox execs akin Shuhei Yoshida, Shawn Layden, and Mike Ybarra have asserted that the next gen isn’t necessary.

“Stick alongside PS5 Pro/Series X until prices normalize. The capabilities of those boxes are the two fine for 99% of the audience. No one is screaming ‘I need a additional mighty console’ correct now,” Ybarra tweeted on October 20th.

“I think [Sony and Nintendo] should try to keep the current generation as lengthy as possible, since I think group are extremely blessed using PS5 and Switch 2,” Yoshida told me on The Vergecast.

“I think we’ve plateaued on the tech, frankly,” Layden told GamesIndustry.biz in 2025. (He’s stated akin before and since.) “Make it cheaper and simpler. Let’s do that instead. And let’s discover a way to have additional hardware companies participate.”

Even if Microsoft ships a $1,800 console, the company’s been apparent it won’t be the only Xbox you can buy. Sharma has publically stated that Helix volition be a “family of devices,” which has been broadly interpreted to average that Microsoft volition let PC industry partners akin Asus market their own “Xbox” as well.

If the reporting pans out, that wouldn’t fair be a cobranded Xbox Ally handheld that runs Windows — Asus could create a console-shaped box that runs a Windows-based Xbox OS, too.

Some of those partners could recommendation additional affordable, small mighty Xboxes than Microsoft’s own flagship box, perchance alongside small retention and memory. Microsoft, too, power have imaginative solutions for storage, akin how the business shipped the Xbox 360 alongside different-size difficult drives, or none at all, to create it additional affordable. “We volition have to empower customers to have extremely elastic retention offerings,” Sharma stated in June.

Or you could buy another Xbox that’s apt going to continue to figure as part of Microsoft’s “family”: the existing Xbox Series X and Xbox Series S.

This can all activity since games don’t need to mark a sole console anymore; they haven’t needed to for a lengthy time. An Xbox One equivalent runs on an Xbox One X and an Xbox Series S and an Xbox Series X since they’re all efficiently AMD-powered Windows PCs, fair alongside distinct amounts of achievement on tap. The Xbox Helix is a mighty expansion of the identical continuum. The identical is true of PlayStation 4, PS4 Pro, PS5, PS5 Pro, and presumably PS6, minus the Windows part.

Perhaps a particular part of hardware volition remain out as the one developers should mark as the baseline for “it looks and runs awesome on Xbox,” the identical way the Steam Deck handheld became a baseline for PC equivalent developers starting in 2022. Maybe, akin the Steam Deck and the Nintendo Switch, it’ll assistance reset our expectations of what a top-shelf equivalent needs to appearance like.

At this rate, I wouldn’t be amazed if the existing Xbox Series S volition be the one. But it could additionally be Microsoft’s own next handheld Xbox. Fortune’s insiders say it’s coming holiday 2027.