Microsoft is about to do something no console maker has ever attempted. The next-generation Xbox, expected around 2027, won’t just be a traditional gaming console. It will be a Windows PC disguised as an Xbox, capable of running your entire Xbox library dating back to the original console, plus every game available on Steam, Epic Games Store, Battle.net, and yes, even PlayStation titles ported to PC.
This isn’t speculation or wishful thinking. According to a detailed report from Windows Central citing insider sources, Microsoft has already secured approval from CEO Satya Nadella and CFO Amy Hood for new AMD silicon that will power this ambitious hardware. The project has been in development across both the Xbox and Windows teams, and the roadmap points to a 2027 launch window.
What Makes This Different From Current Consoles
The next Xbox will run full Windows underneath a console-style interface optimized for TVs and controllers. Out of the box, it will feel exactly like a traditional Xbox console. You’ll go through familiar onboarding, see the same interface you know today, and if you choose, you never have to touch Windows at all. Your entire library of Xbox games from four generations will run natively through the Xbox launcher, just like they do on Xbox Series X.
But here’s where it gets interesting. You can exit the Xbox environment into full Windows whenever you want. From there, you can install Steam and play God of War, Ghost of Tsushima, and Spider-Man. You can download Battle.net and play World of Warcraft. You can grab League of Legends from the Riot Client or classic PC games from GOG. Technically, you could even run Adobe Creative Cloud or Microsoft Office if you wanted to, though that’s probably not the primary use case.
Your Entire Xbox Library Comes With You
Backward compatibility has been a cornerstone of Xbox’s identity since the Xbox One generation, and Microsoft is doubling down on that commitment. The new console will natively run every backward compatible game from the original Xbox, Xbox 360, Xbox One, and Xbox Series X libraries. No streaming, no emulation hiccups, just native performance enhanced by significantly more powerful hardware.
Microsoft has been building toward this moment for years. The company formed a dedicated game preservation team in 2024 specifically to future-proof digital libraries across hardware generations. That team has been working on what they call the “next evolution” of backward compatibility, which likely involves the technical groundwork needed to make this Windows-Xbox hybrid function seamlessly.
The End of Paid Online Multiplayer
One of the most surprising revelations is that Microsoft plans to eliminate the multiplayer paywall on the next Xbox. Right now, you need Xbox Game Pass Core or Ultimate to play online multiplayer on Xbox consoles, but that doesn’t make sense for a Windows PC. Steam, Epic Games, and other PC platforms don’t charge for online play, so charging Xbox users for the same games on the same device would create a massive incentive to just bypass the Xbox ecosystem entirely.
This change could fundamentally alter how Microsoft approaches Xbox Game Pass. Currently, PC Game Pass costs significantly less than Xbox Game Pass Ultimate but includes all the same day-one releases. If the next Xbox is essentially a PC with no multiplayer paywall, the entire tier structure might need rethinking. Windows Central reports that PC Game Pass could be deprecated or rebranded since the distinction between Xbox and PC becomes meaningless in this new paradigm.
The Xbox Ally is the Public Beta Test
Microsoft already has a working prototype of this vision in the wild. The ASUS ROG Ally and Ally X handheld gaming devices run something called Xbox Full Screen Experience, which is essentially what the next Xbox console interface will look like. It’s a TV-optimized, controller-friendly layer on top of Windows, similar to Steam’s Big Picture Mode or SteamOS.
Microsoft initially planned to create its own Xbox handheld but partnered with ASUS instead to get real-world feedback faster. The Ally X has been selling out in core markets, giving Microsoft valuable data about what works and what needs improvement before the next console launches. Sources indicate Microsoft still plans to release its own Xbox handheld eventually, following the same Windows-based architecture.
Technical Improvements for PC Gaming Problems
Anyone who has gamed on Windows PC knows the occasional frustrations. Shader compilation stutters, driver issues, weird user account control pop-ups, games that won’t launch properly. Microsoft is developing new technology specifically to eliminate these problems on the next Xbox. The fixed hardware configuration helps massively, but the company is also working on reducing Windows overheads that will benefit all PC gamers, not just Xbox users.
AI-powered features like Auto Super Resolution and next-generation frame generation will boost Xbox Series X games running on the new hardware. Developers will also have the option to create native next-gen Xbox versions through Xbox Play Anywhere and Smart Delivery, gradually transitioning support from Series X hardware over several years.
What About Price and Availability
Xbox President Sarah Bond has warned that the next Xbox will be a premium experience, hinting at higher-than-typical pricing. However, it should still be cheaper than building an equivalently powerful gaming PC. Microsoft benefits from economies of scale, bulk-purchasing deals with AMD, and not having to pay Windows licensing fees to itself. The open nature of the platform means less traditional hardware subsidizing, but the sheer versatility could justify the premium.
Microsoft also incentivizes developers with a 12 percent revenue cut on the Xbox PC store compared to Steam’s 30 percent. This could encourage more publishers to support Xbox Play Anywhere functionality, giving players both console and PC versions of games. Major titles like Fortnite, Minecraft, and Roblox aren’t on Steam and likely won’t be anytime soon, giving Xbox a continued advantage for those massive player bases.
The Risks and Rewards
This strategy is unprecedented. No company has attempted to merge console and PC gaming on this scale with a unified device. Valve is working toward something similar with SteamOS, but Microsoft has advantages. The Xbox ecosystem includes kernel-level anti-cheat support that still causes issues on Linux-based systems, plus direct access to some of the world’s most popular games through exclusivity and ownership.
Execution will be everything. The Xbox app on Windows still has responsiveness issues. Multi-tasking isn’t always consistent. Windows quirks like random phone game listings in libraries need fixing. Microsoft has until 2027 to iron out every possible issue, and if they don’t, this ambitious experiment could backfire spectacularly. But if they pull it off, the next Xbox could offer more games and more flexibility than any gaming device in history.
Frequently Asked Questions
When will the next Xbox be released?
Based on industry reports and insider information, the next-generation Xbox console is expected to launch around 2027. Microsoft has not announced an official release date, but the extended development timeline suggests the company is prioritizing getting the experience right over meeting a hard deadline.
Will I be able to play Steam games on the next Xbox?
Yes. The next Xbox will run full Windows and allow you to install Steam, Epic Games Store, Battle.net, GOG, and any other PC gaming platform. You’ll be able to purchase and play games from these storefronts just like on a regular Windows PC.
Can I play PlayStation exclusives on the next Xbox?
You’ll be able to play PlayStation titles that have been ported to PC, such as God of War, Ghost of Tsushima, Spider-Man, Horizon Zero Dawn, and others available on Steam or Epic Games Store. True PlayStation console exclusives that haven’t received PC ports will not be playable.
Will Xbox Game Pass change with the next console?
Very likely. Microsoft is reportedly considering eliminating the multiplayer paywall on the next Xbox since charging for online play doesn’t make sense on a Windows PC. This could lead to restructuring of Xbox Game Pass tiers, potentially deprecating or rebranding PC Game Pass.
How much will the next Xbox cost?
Xbox President Sarah Bond has indicated the next Xbox will be a premium experience with a higher price point than typical consoles. However, it should still be cheaper than building an equivalent gaming PC due to economies of scale and Microsoft’s manufacturing advantages.
Will my current Xbox games work on the next console?
Yes. Microsoft has confirmed that all backward compatible games from original Xbox, Xbox 360, Xbox One, and Xbox Series X will run natively on the next console. Your entire digital library will carry forward without needing streaming or emulation.
Is Microsoft abandoning traditional consoles?
Not exactly. The next Xbox will still function as a traditional console out of the box with a familiar interface and experience. The Windows PC functionality is optional for users who want access to games and applications outside the Xbox ecosystem.
A Bold New Direction
Microsoft is taking the biggest risk in console gaming history by essentially eliminating the boundaries between Xbox and Windows PC. The potential upside is massive. Imagine a single device under your TV that plays four generations of Xbox games natively, accesses every major PC gaming storefront, runs competitive multiplayer titles with kernel-level anti-cheat, and costs less than building a gaming PC yourself.
The challenges are equally significant. Microsoft needs to make Windows feel invisible when you want a console experience and seamlessly accessible when you need PC functionality. They need to price it competitively despite premium hardware. They need to convince developers to support Xbox Play Anywhere en masse. Most importantly, they need to prove that gamers actually want this kind of all-in-one device rather than dedicated hardware for specific purposes.
The Xbox Ally devices serve as the real-world testing ground for this vision, and the fact that they’re selling out suggests genuine market interest. If Microsoft can deliver on the promise of every game from every platform on one device under your TV, they might just redefine what a gaming console can be. The 2027 launch can’t come soon enough.