Company hints next-generation console will be ultra-premium hardware following expensive ROG Xbox Ally X launch
Microsoft has dropped major hints about its next-generation Xbox console plans, and gamers might want to start saving their money now. The tech giant's recent comments suggest the upcoming system will target an ultra-premium market segment, potentially commanding prices that could shock longtime Xbox fans.
Xbox president Sarah Bond recently revealed that the company's future console strategy focuses on delivering what she describes as a very premium, very high-end curated experience. This revelation comes alongside the launch of the ROG Xbox Ally X handheld gaming device, which carries a substantial $1,000 price tag and appears to serve as a testing ground for Microsoft's evolving hardware philosophy.
The expensive ROG Xbox Ally X handheld provides crucial insights into Microsoft's pricing strategy for future gaming hardware. While Asus ultimately set the $1,000 price point for this particular device, Microsoft's involvement in the project signals a willingness to embrace premium pricing across its gaming ecosystem.
Current Xbox Series consoles have already experienced significant price increases throughout 2025, with the Xbox Series X now retailing for $649.99, up $50 from its previous $599.99 price point. The Xbox Series X Digital version increased even more dramatically, jumping $50 to reach $599.99, while the premium Galaxy Special Edition now commands $799.99 after a $70 price hike.
These substantial price increases across existing hardware suggest Microsoft is conditioning consumers for even higher costs when next-generation systems arrive. The company appears confident that dedicated gamers will pay premium prices for cutting-edge gaming experiences.
Microsoft's next-generation Xbox will blur traditional boundaries between gaming consoles and personal computers, according to recent industry reports and company statements. This hybrid approach could justify premium pricing by offering unprecedented versatility and performance capabilities.
The upcoming system is expected to support third-party digital storefronts including Steam, Epic Games Store, and GOG, transforming the Xbox into a more PC-like gaming platform. This expanded functionality would provide users access to massive game libraries beyond Microsoft's own ecosystem.
Bond has emphasized that the new platform will deliver gaming experiences across multiple devices without being locked to single stores or tied to specific hardware. This ambitious vision requires sophisticated technology that likely comes with correspondingly high development and manufacturing costs.
Microsoft has promised next-level performance, cutting-edge graphics, breakthrough gameplay mechanics, and unmatched compatibility with existing Xbox game libraries. These ambitious technical goals require substantial research and development investments that will influence final product pricing.
The company has confirmed partnerships with AMD to develop the necessary processing power for these advanced capabilities. High-performance computing components typically carry premium price tags, especially when incorporating the latest technological innovations.
Microsoft's focus on delivering uncompromised gaming experiences suggests the next Xbox will target enthusiast markets rather than budget-conscious consumers. This strategic shift represents a significant departure from previous console generations that emphasized affordable entry points.
Xbox fans have already experienced mounting costs across multiple aspects of the gaming ecosystem. Microsoft initially announced plans to increase new game prices to $80 before retreating to the current $70 standard, while Xbox Game Pass subscription fees have also risen substantially.
These pricing trends reflect broader industry movements toward premium gaming experiences that command higher prices. Microsoft appears committed to positioning Xbox as a luxury gaming brand rather than competing primarily on affordability.
The company's willingness to test consumer acceptance of expensive hardware through products like the ROG Xbox Ally X suggests confidence in market demand for premium gaming solutions, regardless of price considerations.
Industry reports indicate Microsoft targets a 2027 release window for both its next-generation Xbox console and dedicated handheld gaming device. This timeline allows the company to incorporate cutting-edge technology while building consumer anticipation for premium gaming experiences.
The extended development period also enables Microsoft to gauge market response to current premium pricing strategies and adjust future hardware costs accordingly. Early consumer reaction to the $1,000 ROG Xbox Ally X will likely influence final pricing decisions for upcoming console hardware.
Microsoft's emphasis on Windows integration suggests the next Xbox will function as both gaming console and versatile computing platform, potentially justifying higher costs through expanded functionality beyond traditional gaming applications.