Microsoft says Xbox hardware isn't going anywhere — company reaffirms commitment to AMD-powered next-gen console

(Image credit: Xbox)

Microsoft has issued a statement reassuring customers that Xbox is, in fact, here to stay. In response to a gust of rumors stemming from Xbox's much-maligned Game Pass Ultimate price hikes, Xbox has confirmed in a statement to Windows Central that a next-generation Xbox powered by AMD hardware will be coming to market after all.

Microsoft offered the following statement to Windows Central concerning its plans to remain within the hardware space: "We are actively investing in our future first-party consoles and devices designed, engineered and built by Xbox. For more details, the community can revisit our agreement announcement with AMD." The statement throws cold water on any rumors circulating about a possible Xbox hardware exit, relevant though they may have been.

Earlier this month, Microsoft announced a series of price hikes across the Xbox Game Pass subscription tiers. The tech giant is raising its flagship tier, Game Pass Ultimate, from $19.99 to $29.99 per month, a 50% price increase. The PC Game Pass subscription also saw a 38% price increase from $11.99 to $16.49, with the lower two Game Pass "Premium" and "Essential" (née Core) tiers remaining at $14.99 and $9.99, respectively.

These price hikes were paired with hardly very little in the way of upgrades or improvements in service to warrant the new costs. Ultimate members are now eligible to receive up to $100 in rewards points "simply by gaming," and Xbox Cloud Gaming has exited beta for all Game Pass subscribers. Additionally, the $30 tier now also includes a free Fortnite Crew paid membership, representing a $12 per month value for Fortnite players.

In response, many online speculators began bandying the idea that the Xbox Game Pass price increases were part of a subtle exit strategy for Microsoft, to squeeze every dollar out of the gaming sector before exiting it for good. However, as Microsoft's statement today reaffirms, this ignores the highly publicized Microsoft/AMD deal from June, where the two companies confirmed that the next-generation Xbox, likely to arrive around the holiday season 2026, will be powered by AMD's hardware.

"I am thrilled to share we have established a strategic multi-year partnership with AMD to co-engineer silicon across a portfolio of devices including our next-generation Xbox consoles, in your living room, and in your hands," said Sarah Bond, president of Xbox at the time. AMD has committed to designing a slew of semi-custom processors for both the next standard console for Xbox, as well as an upcoming Xbox handheld offering, that will remain backwards-compatible with the Scarlett SoC powering the Xbox Series line.

AMD fans can perhaps breathe a sigh of relief at the recommittment to a new Xbox generation powered by AMD, though perhaps they've grown used to winning today. Earlier this morning, OpenAI and AMD announced a close partnership where AMD will outfit OpenAI's newest data centers with Instinct MI450 accelerators in a deal that will secure "tens of billions of dollars" in revenue for AMD over the next five years, per AMD CEO Lisa Su.

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Sunny Grimm is a contributing writer for Tom's Hardware. He has been building and breaking computers since 2017, serving as the resident youngster at Tom's. From APUs to RGB, Sunny has a handle on all the latest tech news.

21 Comments Comment from the forums

atomicWAR

Good to hear but with current pricing of this gen increasing, stores dropping it all together and rumors next gen is a 3rd party box like the rog ally xbox handhelds... I am hardly inspired by their words when their actions seem to say the opposite. I pray I am wrong but fear I am not.
Reply
TerryLaze

Admin said:
Xbox Game Pass' painful price hikes aren't tied to a desire by Microsoft to softly exit the gaming hardware market.

Microsoft says Xbox hardware isn't going anywhere — company reaffirms commitment to AMD-powered next-gen console : Read more
the community can revisit our agreement announcement with AMD." The statement throws cold water on any rumors circulating about a possible Xbox hardware exit, relevant though they may have been.
"play across devices in entirely new ways"
"not locked to a single store or tied to one device."

You call it cold water I call it lukewarm at best.
The next console they bring out might just be a sff PC. (steam machine type thing)
https://news.xbox.com/en-us/2025/06/19/xbox-amd-next-generation-xbox/
As part of this, Xbox unveiled that it has entered into a strategic, multi-year partnership with AMD to co-engineer silicon across a portfolio of devices, including future first-party consoles and cloud.

This work is part of Xbox’s commitment to deliver an enduring gaming platform that enables you to play across devices in entirely new ways, with an Xbox experience designed for players – not locked to a single store or tied to one device.

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Notton

That's the first I've heard anyone talking about Xbox exiting the console gaming market.
Who exactly is talking about it?

The gamepass price hike was predicted to happen back when Microsoft was trying to acquire Activision-Blizzard in 2023.
You could also easily tell it was going to happen when Microsoft laid off a bunch of people in 2025.
What? Did you think gamers wouldn't be affected by enpoopification?
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Heat_Fan89

I think the XBOX brand is in big trouble. If sales were bad with the Series X/S they will probably be even worse next time. They weren't able to beat Sony in the console wars so I expect they will transition more to software. As someone who has been pro XBOX since 2001, I think I will just pass on their next machine and go Sony. That's if Sony doesn't go nuts with the price.
Reply
bit_user

atomicWAR said:
rumors next gen is a 3rd party box like the rog ally xbox handhelds... I am hardly inspired by their words when their actions seem to say the opposite. I pray I am wrong but fear I am not.
It wouldn't make sense for MS to do a custom SoC, unless it were going to offer a substantially better value than a DIY gaming PC and higher performance than prebuilt mini-PCs employing off-the-shelf SoCs. The costs involved are such that you don't mess around with this stuff, unless your plan is to sell on the order of 10M units.

So, I expect their next gen console is going to be an attractive offering, within its price range.
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TerryLaze

Heat_Fan89 said:
I think the XBOX brand is in big trouble. If sales were bad with the Series X/S they will probably be even worse next time. They weren't able to beat Sony in the console wars so I expect they will transition more to software. As someone who has been pro XBOX since 2001, I think I will just pass on their next machine and go Sony. That's if Sony doesn't go nuts with the price.
Software is the main focus for both (all three) console parties, they sell the consoles for a loss if they have to, to sell more software.
MS will not transition more to software they will just focus less on selling hardware at a loss and focus more on using hardware people already have, to sell more games.
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thesyndrome

They address the rumour and talk about the next Xbox not being cancelled, but all the rumour discussion I have seen has been about the next one being the last, not that it won't come out at all.

Next-generation console plans are done years in advance of the launch because they need to work our all the hardware kinks and the production costs vs performance vs MSRP balance. With this in mind, it would mean they have probably been working on the next Xbox for a few years by this point, meaning they have already signed deals with Hardware manufacturers for the APU and memory and spent money on development, which they won't want going to waste. So people are expecting another Xbox release at some point in the next couple of years, but the perception is that it might be the last Xbox-dedicated console release ever.

It's no big secret that the Xbox hardware division has barely ever made a profit in order to stay competitive, but ever since the Xbox One the company have been on the back foot in the gaming space despite making several MASSIVE purchases of game development studios, which seems unsustainable, however moving away from hardware altogether and leveraging their owned studios into becoming a third-party publisher for any device seems like a good way to focus the company's strengths into a way to make money.
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Raysterize

They just need to make one console with a unified memory pool of 24GB GDDR7, have a 12 Core 24 Thread Ryzen 9 CPU, Radeon RX 9070 XT level graphics minimum and a 2TB M.2 SSD 10,000/10,000 and it will sell no worries... The current vortex cooling design is fine but maybe they will need to add a fan at the bottom as well this time around.
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TerryLaze

thesyndrome said:
but the perception is that it might be the last Xbox-dedicated console release ever.
Even the current series isn't dedicated anymore, MS made dev mode free for all meaning you can run anything that the windows store provides on any xbox.
If they make a new model this will not only be default but they might even have normal windows installed on it.
Reply
Heat_Fan89

TerryLaze said:
Software is the main focus for both (all three) console parties, they sell the consoles for a loss if they have to, to sell more software.MS will not transition more to software they will just focus less on selling hardware at a loss and focus more on using hardware people already have, to sell more games.
That was the old thinking, No? It appears the platform holders are now more focused on hardware profitability. Nintendo has raised the price on the Switch 2 and we know Nintendo never sells its hardware at a loss.

Now we have the price of consoles going up way into their lifecycle. It was cheaper to buy a launch console than it is today. The thought now is that hardware prices may no longer be as we were used to, i.e. software subsidized hardware losses and consoles became cheaper toward the end of their generation.

Here's an article based on the points you raised that suggest that dynamics of the console have shifted this generation.

https://www.eurogamer.net/the-role-of-the-console-is-shifting-are-rising-prices-the-end-for-games-consoles-as-we-know-them
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