Gaming

Xbox still needs console hardware, but it won’t look like anything you’ve seen before.

By Kyle Barr Published November 10, 2025

Reading time 12 minutes

Five years ago today, the Xbox Series X sought to reimagine what the term “Xbox” even was. Back then, the big, black, boxy console promised players they could get peak performance for couch-based gaming for the low price of $500. In 2025, that console with the optical drive now costs $150 more than it did in 2020, and it has been eclipsed by the latest gaming-ready PC chips many times over.

Microsoft’s Game Pass model, which rose along with the Series X to become the best deal in gaming, now costs more than ever if you want the best features.

It all seems like grim tidings, but there’s more at stake than a brand. Xbox is trying to drag the entire games industry industry into a new identity, where exclusivity and first-party hardware like the Series X matter less than the games themselves.

Sure, Halo is coming to PlayStation 5 and Gears of War is already on the console, but Xbox isn’t going anywhere. It could still cut through the clamor and prove the naysayers wrong.

“What they’re attempting to do is blow up the traditional gaming framework,” Circana’s leading video game industry analyst Mat Piscatella told Gizmodo over email. “The key question is if players will be willing to go along with that change.”

When a trickle of bad news becomes a flood, it can seem near impossible to see any bright spot of hope. With the move toward a subscription-based gaming landscape, we own less and grow more dependent on digital platforms. We suffer at the whims of the platform holders, unable to do anything but roll our eyes at the inevitable process of enshittification. Then there’s the recent drama from Bloomberg’s report claiming Microsoft has placed a 30% profit margin mandate across its Xbox brand, which is way above the industry standard. The report puts the Xbox’s recent actions into perspective.

Harping on these pain points is less like beating a dead horse, and more like kicking the shins of a poor, hobbled creature who’s pushing itself harder than anybody else. The Xbox brand is still alive despite the crushingly dour outlook of the fanbase. Xbox could make the case that exclusivity has no place in our modern gaming landscape. While the majority of gamers would be fine streaming their titles from home, there will be a dedicated subset of gamers who would pay through the nose to get the absolute best gaming hardware there is without funneling thousands of dollars into a gaming PC.

Xbox needs a plan. Better yet, it needs to lift the lid on its plans if it wants players to get on board with its attempts to completely flip the script on gaming.

How did we get here?

© Sam Rutherford / Gizmodo

The Xbox is philosophically distinct from every other console on the market, and that informed what eventually became the Xbox Series X. The designers behind the original Xbox console back in 2001 wanted to take what was essentially a Windows PC and plug it into the living room. The system used Microsoft’s own DirectX technology and ran on equivalent computer parts. Eventually, that “DirectX Box” became, simply “Xbox.” Just a few years after launching its original console, the company found massive success with the Xbox 360. It was a console with a lifespan that lasted nearly 11 years, becoming the company’s best-selling device. Microsoft only killed off the Xbox 360 store in 2024.

Microsoft’s follow-up, the Xbox One, launched with a heavy focus on multimedia. In 2013, Microsoft emphasized the console as an “all-in-one home entertainment system” and kept bringing up Live TV as a killer feature. The console suffered from numerous controversies, like that infamous attempt to require an internet connection, limit players’ abilities to buy used games, and force users to hook up a Kinect. Former Xbox Senior Vice President Don Mattrick told players, “Fortunately, we have a product for people who aren’t able to get some form of connectivity. It’s called Xbox 360.”

The Xbox 360 lasted for 11 years, but it seems like the Xbox Series X’s lifespan will be much shorter. © Kyle Barr / Gizmodo

After a large C-suite shakeup that saw the rise of Phil Spencer—now the CEO of Microsoft Gaming—Microsoft launched two consoles on Nov. 10, 2020. The Xbox Series S was a lower-end console built for playing Game Pass titles and modern games at 1440p resolution. The big daddy, the Series X, was the most “box-like” Xbox the company had ever devised. Microsoft promised it was designed for 4K gaming, packing in the both AI upscaling and ray tracing capabilities to make games play and look their best.

The thing we often forget about the Xbox Series X is how much it was a continuation of Microsoft’s original pitch way back in 2001. The console is full of PC guts, even if it doesn’t feel like any kind of Windows machine. And yet, it’s a powerful console for its price thanks to its custom 8-core, 3.8GHz AMD processor built on what was then the still-relatively new Zen 2 CPU and RDNA 2 microarchitecture. The console promised double the FLOPS (floating point operations per second) compared to the Xbox One. It came with 16GB of fast GDDR6 RAM for shorting loading times and a full 1TB SSD to hold the growing size of next-gen games. The storage was more than the 825GB SSD in the original (and most recent) PS5. The Xbox Series X internals are especially interesting—at least for hardware nerds like yours truly. In interviews, designers like Xbox’s Director of Mechanical Engineering Jim Wahl talked about how the console’s split motherboard design allowed it to direct cool air onto all components in a steady stream.

The Xbox Series X was a tall tower of gaming potential, though this console generation lacked many of the big-name titles that would get players to rush out for the latest hardware. Halo Infinite didn’t arrive until late 2021. The games that have come out since 2020 haven’t stuck around on Xbox’s own console, either. Titles like Forza Horizon 5 are now on PS5. More recent titles like Indiana Jones and the Great Circle hit Sony’s console in April this year.

Microsoft does not reveal the total number of console shipped or sold. Still, best estimates show the Xbox Series S and X has shipped around 30 million units total as of February 2024. To put that number in context, the PS5 has shipped around 80 million units worldwide as of November 2025, and the original Switch has shipped over 154 million consoles as of September 2025, though Nintendo launched its system in 2017. Xbox console revenue has declined precipitously over the past year compared to PlayStation 5. After price hikes, the PS5 actually saw a bump in total sales. In Microsoft’s latest quarterly earnings report, Xbox hardware sales were down 22% year-over-year.

Where’s the mid-cycle Xbox?

Ninja Gaiden 4 is a great game for Xbox, though it’s not perfectly tuned for the Xbox Ally X handheld. © Adriano Contreras / Gizmodo

There has been no sign of a mid-cycle refresh console, like Sony did with its PlayStation 5 Pro to complement its (now) $550 PS5. Leaked documents from Microsoft’s legal battle with the Federal Trade Commission showed the company had at least drawn up designs for a mid-generation device called “Brooklin.” That rounded Xbox hasn’t materialized. The closest we ever got was a new disc drive-less version and a Galaxy Black Series X with redesigned internals and 2TB of storage (that console now costs $800). The first real hardware in five years beyond another controller colorway is the $1,000 Asus ROG Xbox Ally X, a great handheld PC but not something the console crowd could easily get used to.

Calling the Xbox Ally X handheld an “Xbox” confused players who imagined they would receive a console-like experience. People who worked on the original Xbox, like Seamus “father of Xbox” Blackley, said, “Is it actually just a branded laptop with joysticks?” The handheld’s UI is still unfinished. There are some menus on the Xbox app that don’t work well with a controller. There are other major issues with the Xbox Ally X going to sleep when in game that can cause it to not restart. One of the original founders of Xbox Game Studios, Laura Fryer, is a constant critic of Xbox’s latest moves. In a recent video, she said the Xbox Ally forgets the fundamentals of UX—or user experience—where “time is the real currency, not cash.”

The leaked tubular “Brooklin” Xbox Series X refresh seemed more impressive than the Galaxy Black Series X we got. © FTC

The next-gen Xbox may have a UI much like the Xbox Ally. In which case, the handheld is only a beta for what comes next. The Asus-made handheld was never going to be a real Xbox. It’s simply a continuation of trends with today’s handheld PC gaming devices. Brian Crecente, president of video game consulting company Pad and Pixel, said that Microsoft’s marketing surrounding the handheld only led to more confusion, especially when it kept trying to convince gamers that every PC is also an Xbox.

“That shift is something they keep trying to do, and it keeps blowing up in their face,” Crecente, who was also the former editor-in-chief of Kotaku (now, sister site to Gizmodo once again) and a cofounder of Polygon, told Gizmodo. He’s been witness to Xbox’s many successes and foibles.

“The landscape of gaming is on the verge of seismic change,” Crecente said. “When you can play Halo on a PlayStation and God of War on a PC, you know things have changed,” Crecente said. The only question is whether Xbox is correct to refocus on being an uber publisher, especially when its parent company demands such high profit margins that studios can’t possibly match.

Any next-gen Xbox demands a UI that works. In that way, Valve is already far ahead of whatever is happening at Microsoft. Valve’s Linux-based SteamOS software is easier to navigate on handhelds, and it could be coming to more devices like a VR headset or a PC-like console. Microsoft “has always been chasing Valve,” video game researcher and NYU Stern School of Business professor Joost van Dreunen told Gizmodo. It’s a smaller, more agile company run by ex-Microsoft programmer Gabe Newell. Steam—which most developers think is a monopoly—makes so much money, you could consider it a yacht factory for the Valve CEO. It’s not likely to sell out to Microsoft or anybody else any time soon.

© Adriano Contreras / Gizmodo

Xbox publishing karma is all over the place

Indiana Jones and the Great Circle was one of those potential console-defining games. Too bad it came to the PS5 a few months after launch. © Bethesda

All this hubbub around hardware ignores what Xbox has been truly focusing on: the games. Earlier this year, *Clair Obscur: Expedition 33, *a game that harkens back to old-school JRPGs with a French flair, became a hot success despite being developed by a small team of just 30 people. A big reason Clair Obscur: Expedition 33 blew up was because Xbox promoted it in 2024 and brought it to Game Pass in 2025. As Stephen Totilo wrote in his recent Game File newsletter, Microsoft published a dizzying array of great titles, including RPGs like Avowed and The Outer Worlds 2, shooters such as Doom: The Dark Ages, and smaller indie titles like South of Midnight and Keeper.

The “Xbox Series” hardware was altogether interesting, though in the end the PlayStation 5 and Xbox Series X were essentially tied for performance. Nintendo was off doing Nintendo things, making bank on its cheaper $300 Nintendo Switch dockable handheld. Even five years ago, the console wars were effectively already in their death throes. Games in the modern era cost more than ever to develop. Lead times are longer, and AAA marketing budgets alone can dwarf mid-sized projects. With rising costs, major first-party publishers can’t imagine making a profit unless their games are on every platform available.

In 2025, Xbox published a dizzying number of titles, including instant classics like Doom: The Dark Ages. © id Software/Bethesda Softworks

“For the longest time, the narrative around gaming has been about better, faster, bigger [hardware], when in fact it’s the games,” Joost van Dreunen said.

It was around this time two years ago that Microsoft completed its $68.7 billion buyout of what was then one of the largest publishers on the scene, Activision Blizzard. The purchase promised to put Call of Duty on Game Pass, but shortly after making the deal final the Microsoft laid off hundreds of staff. Microsoft has continued firing thousands of workers in the year since. Microsoft killed the long-awaited Perfect Dark reimagining and axed its developer, reportedly laid off staff from multiple Call of Duty co-developers Raven Software and Sledgehammer Games, canceled a new MMORPG from the developer of Elder Scrolls Online, and hurt numerous other small indie developers.

It’s impossible to say where the needle falls on Xbox’s karma for 2025. It brought us several games from small and big studios alike, and just as easily dismantled many more studios and fired the staff creating those games.

We have to talk about Game Pass

Game Pass for Xbox and PC is now more expensive for the highest tier. © Kyle Barr / Gizmodo

At launch, what really differentiated the PS5 and Xbox consoles was Game Pass. Microsoft’s gaming subscription model would soon become the backbone of Xbox’s entire gaming strategy, one that eschewed exclusivity in favor of becoming a kind of “Netflix of games.” This included crossplay features to let you buy games on Xbox and play them on PC or even your phone. Over the years, this would morph into the “Xbox everywhere” strategy, which is why you now see those annoying ads trying to convince you that “everything is an Xbox.”

Game Pass steadily became more expensive over the years, but those price increases were insulated thanks to new features. The big selling point for the subscription is access to a multitude of great games from Xbox past and present. Additionally, Xbox Cloud Gaming would let gamers who paid more play several big titles by streaming them from the cloud. That feature was called a “beta” for years until its most-recent 2025 update. The other big selling point for the highest “Ultimate” tier was “day one” games. Now, to get access to the latest Call of Duty and other AAA titles on launch day, you need to spend even more ($30 instead of $20) to get access.

Microsoft makes most of its money by selling services like Windows 11, 365, or Azure to businesses. Xbox is the most consumer-facing brand of its entire product stack. “It’s a bit of a tragic thing,” van Dreunen said. “You’re trying to be the coolest house on the most boring block.”

Xbox is the one piece that doesn’t gel with the rest of Microsoft’s business. That’s why the reported 30% margins would only make sense from somebody who doesn’t comprehend the gaming industry. After all, Xbox could be a new way to shove Windows in front of even more players and fight back against the ever-encroaching Valve.

It’s all about the box. Which means Xbox still needs some sort of hardware to make a case for itself. Based on leaks, the next-gen Xbox, dubbed Project Magnus, will have a powerful custom AMD chip that dwarfs what’s going into the next-gen PlayStation console. That has hardware aficionados speculating the system could easily cost around $1,000 or even more.

This would be a “business class” console for players who simply want the best, according to van Dreunen. Everyone else can make due on other devices, and not just your smart TVs.

Xbox will need something big for 2026

Xbox is done with exclusives. It’s made that perfectly clear. But while Xbox has been more verbose on the matter, PlayStation is making similar moves by sticking its once-exclusive games on PC. The next-gen PlayStation may emphasize similar cross-play features as Xbox has, where players can buy their game in one place and pick up their save whether they’re on console or another device. Nintendo is still the only one promoting exclusivity both in first- and third-party titles. Considering the staggering rate of Switch 2 sales, it’s not doing half bad sticking with what works.

Van Dreunen said that while other gaming companies like Take-Two Interactive can delay games like GTA VI on a whim, because that’s their entire business, Xbox isn’t built for that. Xbox as a brand makes up such a small part of Microsoft, but it means the company thinks of its business in terms of decade to decade, not year to year. It will analyze its success if it can hit 100 million Game Pass subscribers by 2030, as leaked documents suggested was the company’s hopes. Of course, if it was getting anywhere close to that number, Xbox would have said something by now. Xbox has not relayed anything official about Game Pass subscriber numbers since February 2024, when the number sat at 34 million.

“It won’t really matter how many Xbox-branded console devices they’ll sell in the future if they’re able to generate players and engagement through its other ecosystem entry points,” Piscatella told Gizmodo. “But, again, the question is if video game players will go along with it.”

“I’m not sure Xbox knows what makes Xbox great,” Fryer said in a video criticizing the big October Game Pass price hike. Fryer said that the Xbox console wasn’t about selling hardware, but about creating a “closed loop” where the company can create both a customer and developer relationship. That Xbox “lifestyle,” as Fryer put it, can’t exist when players are taking their games to whatever device they may choose.

© Joshua Seiler / Shutterstock

Microsoft isn’t changing course, and Xbox’s major plans won’t come to fruition for at least another year, at least. With cloud gaming and Game Pass, hardware doesn’t matter nearly as much. Xbox could be coming to the point where it only sells hardware as a premium option. Microsoft has long relied on OEMs, or original equipment manufacturers, for its PC business. Piscatella told Gizmodo that Xbox could be edging toward a future where it may create its own prototypical devices, relying on companies like Asus to make the hardware. This would be the same way Microsoft leads with its Surface PCs, and its partners more or less reference its designs.

In prior years, players were all too ready to decry the state of exclusivity. Hardware-specific games stranded poor players on single-console ecosystems. It kept gamers from appreciating the true breadth of what kind of art was on offer. No, gamers as a demographic will never be happy, especially not with change.

Xbox would be better off if it could become more transparent. Xbox President Sarah Bond has been making the rounds to talk about the console, but the lack of specific information is making longtime gamers antsy. PlayStation has hosted a few fireside chats with AMD to talk up its future plans, but Xbox can go one step further. It can start building hype for its next-gen console now. It can talk up what kinds of benefits players will get for sticking with Xbox hardware—if not exclusive games, then exclusive capabilities that the Series X never had and never will.