Xbox is undergoing a period of restructuring, and platform leadership has repeatedly emphasized that consoles remain a key part of Microsoft's gaming business. However, the next generation of hardware risks becoming the most expensive in the history of home gaming systems. According to Fortune, internal forecasts for the Project Helix console price reach up to $1800. The publication clarifies that this refers to a range from $1200 to $1800, unless Microsoft decides to subsidize the cost of the device.
Historically, Microsoft has sold its hardware at a noticeable discount relative to cost, doing so more aggressively than Nintendo and Sony. However, living room gaming devices have never been this expensive before. According to available data, similar price pressure is also being experienced by the PlayStation 6.
Xbox head Asha Sharma previously identified affordability as one of the main issues for Project Helix. The race in artificial intelligence is consuming virtually all available supplies of memory and storage, even though some already assembled server racks in new data centers are currently idle. The situation is so serious that Microsoft is struggling to maintain the availability of Xbox Series X and Series S in stores, despite significant price increases over the past 12 months.
Several factors are putting pressure on the final cost of the new console. These include a shortage of memory and storage due to large-scale data center construction for AI, a projected increase in memory prices in 2027 and 2028 as stated by the manufacturers themselves, and a small base of sold Xbox consoles of the current generation, which limits revenue from commissions.
The last point is directly related to how console manufacturers usually compensate for the low price of hardware. The platform owner receives a commission from each sale of third-party publisher games, and Sony earns hundreds of millions of dollars this way on projects it has no involvement in creating. If the platform's audience grows slowly, as happened with Xbox in the current generation, this source of income is significantly reduced.
The model of selling consoles at a loss was detailed in 2022 by former Xbox head Phil Spencer. According to him, consoles as a business model are very different from phones and are essentially sold at a loss. When someone goes to a local store and buys an Xbox, the company subsidizes this purchase by an amount ranging from $100 to $200, hoping to recoup the investment over time through sales of accessories and the digital store.
Even if Microsoft agrees to continue subsidizing each sold console by several hundred dollars, such a subsidy is unlikely to significantly affect the price of a machine that would cost $1800 without it. According to memory manufacturers, the cost of components will continue to rise in 2027 and 2028. As for the release, the launch of the next Xbox is planned for 2027.
This material is prepared solely for informational purposes and does not constitute financial advice or a recommendation.