Thanks to Xbox and PlayStation first-party games crossing over, many believe 2025 marks the console wars' official end. Nevertheless, Microsoft's gaming division is still not giving up on the console market and says its 'next-gen hardware' is already in development. But at this point, it’s unclear who's actually asking for one.
In a recent interview with Variety, Xbox president Sarah Bond confirmed that the company has been 'looking at prototyping and designing' its next console. She also announced a partnership with AMD and praised the success of the ROG Xbox Ally handheld, which she described as 'overwhelming.' Bond emphasized that Xbox wants to make sure people 'have a choice between consoles, handhelds, and PC.
But after years of declining console relevance and a shifting focus on Game Pass and ecosystem, it's clear that Xbox has no reason to exist.
A Console Without a Cause
Excluding the 360, Xbox has always marketed its console as the 'most powerful' of its generation. But the 8th-generation Xbox, the Series X, has now been defined more by ecosystem expansion than by hardware identity.
It shouldn't come as a surprise. After all, despite Microsoft's attempt to continue pushing hardware, Xbox’s relevance in the console market has been slipping for some time. For fiscal year 2025, Microsoft's gaming hardware revenue alone fell by 25% year-on-year -- while overall global gaming revenue rose by 9% to $23.5 billion.
Even Xbox’s shaky first-party output hasn't helped. Its flagship franchise, Halo, has completely lost its momentum. Infinite launched in a half-finished state and delayed key features such as cooperative play, while The Master Chief Collection needed years of patching to be actually playable. Lacking fans' trust, instead of continuing the series -- or licensing it out to more third-party developers like Halo Wars and Spartan Assault -- it has to rely on yet another retread of Master Chief's debut, Halo: Campaign Evolved.
Long-dormant fan-favorites like Fable, Conker, and Perfect Dark, too, keep getting reintroduced in trailers that never lead anywhere or are straight-up cancelled. Combined with thousands of layoffs from 343 Industries, Tango Gameworks, to parts of Activision-Blizzard, it paints a picture of a studio network trying not to implode under massive pressure.
The new AMD collaboration tied to Xbox’s handheld efforts isn't an evolutionary breakthrough either. As PlayStation runs on AMD chips too and has been hyping up its AI-powered graphics tech: Project Amethyst. The ROG Ally partnership with ASUS? Feels more like a desperate branding attempt to stay relevant rather than a genuine attempt to overtake the Steam Deck and the handheld PC market.
The Box Nobody -- Not Even Its Maker -- Needs
Still, there's no denying that Xbox’s ecosystem is stronger than ever. Game Pass, despite recent pricing controversies, remains the core of its revenue stream. Gaming content and services revenue rose by 13% and the subscription reportedly brings in nearly $5 billion annually. Seamless multiplatform support and releases for tentpole games like Gears of War: Reloaded and Halo: Campaign Evolved definitely help the brand to exist everywhere. On a PC, PlayStation 5, and probably your toaster next.
But that's exactly the problem. When everything is Xbox, what's left for the console to justify?
"I have no idea what the hell Xbox's game plan is, man," wrote a concerned fan on Reddit. "I've been primarily an Xbox gamer since 2004. It's sad to see how far the Xbox brand has fallen. It's practically a joke now."
"I REALLY cannot understand people that somehow still believe in Microsoft/Xbox at this point," said another on X.
Retailers, too, seem to share the same doubt. Costco in the US and UK reportedly stopped stocking the Xbox Series X|S, both online and in stores. Meanwhile, availability in regions like Brazil and parts of the Middle East has also reportedly declined. Microsoft, of course, denied it, insisting that major chains 'remain committed partners.' But the optics say otherwise: when even big retailers hesitate, 'choice' starts to sound like an excuse for fading demand.
This is compounded by the fact that, behind the scenes, Microsoft's priorities have shifted. Insiders say the company is now pivoting harder toward AI and cloud services -- a direction Satya Nadella has publicly pushed since 2023. Meanwhile, Microsoft’s gaming division has been given an aggressive 30% profit-margin target, according to Bloomberg's report. In that light, hardware has become a distraction and no longer a focus.
The next Xbox might still arrive, but it'll be just a reflex. The result of a company that feels obligated to ship something physical even as its future moves beyond it.