A founding member of the original Xbox project has expressed concerns regarding Microsoft’s commitment to its console hardware business. The platform skepticism reflects worries about the sustainability of Xbox’s current content strategy in light of dwindling hardware sales.
After substantial investments in acquiring developers, Microsoft began shifting towards multi-platform game publishing in February 2024. This transition became evident when it released Obsidian’s Pentiment on the latest PlayStation consoles and the Nintendo Switch.
Over the following months, titles such as Hi-Fi Rush, Grounded, and Sea of Thieves also went multi-platform, with Forza Horizon 5 and Indiana Jones and the Great Circle following a year later. By June 2025, Microsoft announced two third-party Xbox devices, further emphasizing its diminishing focus on in-house hardware.
Amid these changes, a credible source indicated that Microsoft has abandoned plans for an in-house Xbox handheld console, opting instead for collaborations with third-party companies. This strategic shift has drawn scrutiny from Laura Fryer, a key figure in the Xbox project and former director of the Xbox Advanced Technology Group.
In a video posted to her YouTube channel, Fryer analyzed Microsoft’s new direction, suggesting it is easier to rebrand existing hardware, like the Asus ROG Xbox Ally X, than to develop in-house products. Fryer has stated bluntly, “I think Xbox hardware is dead,” asserting that Microsoft’s focus on Xbox Game Pass reflects this shift.
She highlighted the release of the first-ever $80 Xbox game, The Outer Worlds 2, as evidence that the company is prioritizing subscription services over traditional game sales. While Fryer acknowledged Microsoft’s extensive IP library and some successes like Oblivion Remastered, she questioned the long-term viability of this strategy.
She posed critical questions about the future of Xbox, seeking answers on what will keep the platform relevant in 25 years. Despite Fryer’s assertions about first-party hardware being effectively finished, rumors suggest that Microsoft is still working on a new in-house console.
Insider reports indicate that this next-gen Xbox may take the form of a PC in a TV-friendly shell, projected to launch between late 2027 and 2028, coinciding with the anticipated PS6. However, plans for a handheld console, which Microsoft Gaming CEO Phil Spencer had confirmed as a prototype, seem to be on hold as the company shifts toward portable gaming partnerships.