Boxed in and outfought by Sony’s all-conquering PlayStation, Microsoft is navigating Xbox beyond the traditional console landscape.
Note (3 July, 2025): Since writing this article, Microsoft has announced sweeping layoffs across its Xbox division, affecting studios such as Turn10, The Initiative, and others. The news has sparked rightful concern and criticism, casting real doubt on the integrity of the company’s vision. I’m still excited by the potential I explore below, but there’s no escaping the bitter taste these developments leave behind. Innovation is exciting, but at what cost? Maybe it’s just not worth it anymore.
After two decades of living and dying by its hardware, Microsoft is transforming Xbox into a platform-agnostic service that is unshackled from any single device. It’s a change of direction that will have a significant impact on the way we play and access games, and could lead to a redefinition of what a video game console is.
If the Xbox One hadn’t had such a disastrous launch, and if Xbox Series X/S had kept pace with the PlayStation 5, maybe it wouldn’t be this way. But as Nintendo demonstrates, innovation often happens when the pressure is on.
Cash helps too. Under Phil Spencer’s watch, Microsoft has steadily built the foundations of a service-first future. The change has been built upon the development of cloud infrastructure, the evolution of Xbox Game Pass, and a raft of eye-wateringly expensive studio acquisitions.
This is an Xbox (Most of the time)
Microsoft has been teasing its hardware-agnostic ambitions for a while now. As far back as 2020, rumours swirled about Xbox Game Pass coming to Nintendo Switch. Although that particular push never materialized, it revealed Microsoft’s ambitions to extend Xbox beyond its own consoles.
Microsoft’s recent marketing push suggests that anything can be an Xbox. And while that’s not always true, Xbox Cloud Gaming and Remote Play do significantly broaden the places players can access their libraries.
Game Pass Ultimate subscribers can stream titles to phones, tablets, and even Meta Quest headsets. Xbox controllers pair with nearly any device, and Microsoft continues to push for deeper smart TV integration. This is more than a gimmick. It’s a calculated pivot to make Xbox a service, not just a product.
Xbox President Sarah Bond recently reaffirmed the company’s partnership with AMD for its next generation of consoles, handhelds, and accessories. The announcement keeps Xbox competitive in terms of performance but was carefully worded to avoid tethering Xbox to traditional hardware cycles. It essentially confirmed that all future Xbox systems would be Windows devices.
The Windows Future
The upcoming ROG Ally X, a third-party, Xbox-branded portable PC launching later this year, is the first tangible demonstration of this approach. It may have an Xbox logo on the box, but it isn’t a handheld console. It’s a portable gaming PC with an Xbox layer, seemingly like SteamOS, that appears to allow access to your games whether you purchased them from Microsoft, Steam, GOG, or Epic. It’s the first true manifestation of Xbox-as-a-platform hardware and a sign of things to come.
The common belief is that the next Xbox home system will follow a similar approach. It will not be a “console” in the traditional sense, but a Windows device optimised for Xbox gaming. And like the ROG Ally X, it will support third-party storefronts. From a software perspective, Game Pass is now the brand’s unique selling point, not exclusives.
This shift is not without its pitfalls. Chief among them is player investment. Xbox fans have built vast digital libraries, some stretching across three console generations. Losing access to those titles would be catastrophic. Any move to PC or alternative platforms must preserve this digital heritage. This includes backward-compatible classics, many of which may need porting or emulation to work seamlessly.
There are also challenges related to technical complexity and maintaining consistent performance. For instance, how would a game designed for the latest, powerful Xbox home system perform on a two-year-old ROG Ally X? Streaming introduces latency and quality limitations, and not all devices support the same features. Ensuring a consistently high-quality Xbox experience across a fragmented landscape is a significant challenge.
The advantage of video game consoles is that they simplify the gaming experience. They provide a standard environment for developers, ensuring that users have confidence that any game they buy for the system will just work. This is often not the case for PC gaming, as my own frustrating – and sometimes entertaining – experiences with the Steam Deck demonstrate. What you gain with a PC is undeniable, but it comes with an overhead for the end user. It remains to be seen how this blurring of the lines will be received by consumers accustomed to plugging in a box under the television and jumping straight into Call of Duty.
There are numerous questions Microsoft will need to answer to make this shift palatable to both mainstream audiences and the core Xbox fanbase, who have remained loyal through some notably lean years.
Despite the hurdles, Xbox’s strategy makes sense. Microsoft was never a traditional hardware manufacturer maker heart. It was, and remains, a software and services business. Why fight over 100 million consoles when you can aim for a billion screens?
In this new era, Xbox might become the most accessible gaming platform in history. Available via dedicated devices, streaming sticks, mobile phones, laptops, and smart TVs, it could free players from the limitations of a single piece of hardware. Ease of access and Game Pass could become the brand’s defining features. Or it could become a confusing collision of systems, specs, storefronts, and expectations.
We should also not forget the lengthening string of layoffs that have accompanied this transformation. These cuts continue to cast a shadow over every bold new move.
Despite these concerns and a wealth of what-ifs, I think I’m down for it. If nothing else, it could mark the end of the console war. The video game hardware landscape will become a more interesting patchwork of Xbox-accessible devices, dedicated home consoles from Sony, and hybrid systems from Nintendo.
If Microsoft can minimise the friction between players and their games – and that’s no small feat with Windows at its core – the biggest and most popular Xbox might end up being the one you never even see.
