Next-Gen Xbox Could Cost Up to $1,800, Report Says

A Fortune profile of Xbox chief executive Asha Sharma, published October 20, says the company's next-gen Xbox console is internally projected to cost consumers between $1,200 and $1,800 unless Microsoft subsidizes the hardware. The machine, codenamed Project Helix, is expected to arrive after a handheld device planned for the twenty twenty-seven holiday season, with the full console following for the holidays in twenty twenty-eight.

The report, written by Fortune technology correspondent Sebastian Herrera, attributes the eye-watering projection to severe part shortages and a surge in memory-chip prices driven by the artificial intelligence boom. People familiar with the company's plans told Fortune that Helix engineering deadlines have been moved up by at least several months. Microsoft has not publicly commented on the price projections, according to coverage by Hypebeast.

Why the price is so high

Memory prices are the crux of the problem. Console makers depend on fast RAM to run modern games, and that memory has grown dramatically more expensive as data centers buy up supply for AI training. Micron, a major chip manufacturer, warned on October 2 that shortages of RAM and tight supply conditions would continue into twenty twenty-eight, according to The Brief. The broader AI hardware rush is a story of its own, with Nvidia and Reflection pushing open AI models into the enterprise.

Microsoft has already passed some of that pain to buyers. The company raised prices on its current Xbox Series S and X consoles by up to $150 earlier this year. A subsidy, by contrast, means Microsoft would sell the Helix console below its manufacturing cost and absorb the difference, a practice console makers have long used to keep shelf prices palatable. Fortune's reporting makes clear the projection is an internal estimate, not a final retail price, and it could change before launch.

A handheld first, then the console

The rollout described in the profile has two stages. Xbox plans to release a handheld device for the twenty twenty-seven holiday season, setting the stage for the full console during the holidays the year after. Sharma hinted at this shape of the plan in an August interview, calling the coming hardware a family of gaming devices rather than a single machine.

What Microsoft has said officially is narrower. In a March 11 post on Xbox Wire, Xbox executive Jason Ronald described Helix as a first-party console designed to play both Xbox console games and PC games, powered by a custom chip from AMD. According to TradingView, the hardware will also use AMD's FSR 4.1 machine-learning technology. Early alpha versions of the hardware are expected to reach game developers starting that year, per Game Informer.

Game Pass and jobs are being reshaped too

The Fortune profile describes a sweeping overhaul of Game Pass, Microsoft's subscription service for games. Players would choose features a la carte, with add-ons for console-only games, cloud gaming, and multiplayer arranged inside a tiered structure, according to the report. Ad-supported and ad-free tiers are also under consideration, reported by Inven Global.

The same report says Sharma has cut nearly nineteen hundred positions as part of a plan to reduce Xbox headcount by thirty-two hundred over the next year. People familiar with the plans told Fortune that further rounds of layoffs are planned for October, November, and January, though they noted that layoff plans can change.

The profile also documents a fight inside Microsoft over the software the new hardware should run. Windows leaders wanted the upcoming handheld to run a trimmed-down version of Windows Home, while Sharma's team wanted to build its own software, according to people briefed on the clash cited by Fortune. A senior Xbox executive threatened to scrap the handheld rather than adopt the Windows build. Xbox now largely controls the direction of the operating system, and Sharma told Fortune the division cannot build Helix on its own.

Why this matters for players

Consoles have traditionally launched at prices ordinary households could justify, often with the manufacturer taking a loss on the hardware itself. A console priced north of a thousand dollars would break that model entirely and could reset expectations across the industry, where Sony's PlayStation and Nintendo's Switch 2 are competing for holiday spending.

Sharma's position adds a wrinkle. Microsoft chief executive Satya Nadella put her in charge of Xbox in February, replacing Phil Spencer. Fortune describes her as having no video game background before taking the role, and now leading a twenty-one-billion-dollar business spanning hardware, studios, and thousands of game titles. Her stated ambition is for Xbox to reach more than one billion people each day, against a current daily active audience of one hundred million.

None of these plans are final, and Microsoft could still choose to subsidize the console heavily. But the projection signals where the industry is headed: AI demand is eating the component supply chain, and the cost is landing on gamers. Gaming's overlap with artificial intelligence is widening elsewhere too, with AI-generated soundtracks already entering live games. Expect the subsidy question to dominate Xbox news until the company says otherwise.