The next Xbox might not be a traditional console at all, but a Windows-powered PC wrapped in a streamlined, gaming-first interface that could launch as early as 2027. And if that’s the direction Microsoft is taking, it raises the obvious question: are classic consoles heading toward extinction?

Microsoft has increasingly been distancing itself from the classic console formula, largely because Xbox hardware sales have struggled since the Xbox One era. The company may also introduce new hardware before the end of 2026, such as a redesigned controller or even an OEM Xbox-branded PC. The next device is expected to run a lightweight Windows 11 setup, reportedly called Full Screen Experience (FSE), designed to reduce memory usage.

When Microsoft launched the original Xbox in 2001, it immediately stood apart from Sony and Nintendo thanks to its identity and exclusive games, and it quickly became a serious competitor. That momentum carried into the Xbox 360 era, where Microsoft not only beat the PS3 in sales, but also positioned itself as the stronger performer for many players. Things began to slide with the Xbox One, and by the time the Xbox Series X/S arrived, sales were weak enough that Microsoft shifted strategy altogether.

Much like the ASUS ROG Xbox Ally we saw a few months ago, Microsoft now appears to be aiming for an Xbox Next device that functions essentially as a Windows-based desktop gaming machine, with 2026 being a possible window for that move. Instead of releasing consoles years apart, Microsoft seems more interested in delivering hardware more frequently. According to recent claims from Windows Central’s Jez Corden, Xbox Next may run Windows 11 FSE, the same streamlined concept already used in the ASUS ROG Xbox Ally, and it supposedly requires 2 GB less RAM.

That would push it closer to a PC than a console, because while today’s Xbox hardware already resembles a computer internally, the operating system has traditionally kept it within a closed ecosystem. If the OS becomes a more flexible Windows variant, that distinction becomes much harder to maintain.

Everything suggests Microsoft wants something similar to Valve’s Steam Machine concept, only with far more power behind it. The interface would be built around the Xbox Full Screen Experience (FSE) app, targeting both PC players and console users at the same time. The big goal would be access to multiple storefronts, including the Microsoft/Xbox Store, Epic Games Store, and of course Steam.

As for hardware, previous reports point toward an AMD-based design, and pricing may be higher this time around. So if you were hoping for a cheaper console-style option, this may not be what you wanted. Last year, Microsoft partnered with ASUS to launch the ASUS ROG Xbox Ally, positioned as the first step toward this future direction. It is not a console in the traditional sense, but a PC engineered to behave like a handheld console, similar in spirit to the Steam Deck.

In practice, it looked much like a ROG Ally X, but with improved ergonomics and a modified version of Windows 11. And the ASUS ROG Xbox Ally likely won’t be the only device in this category, as rumors claim Microsoft could reveal either a new Xbox controller or an OEM Xbox PC by the end of 2026.

Source: tech4gamers