Microsoft's next home Xbox console is reportedly still at least two years away, but a new handheld Xbox device could arrive much sooner, potentially launching as early as next year.
It's hard to talk about Xbox in 2026 without mentioning Asha Sharma, the new leader who has been reshaping Microsoft's gaming division.
Sharma has already shared several ambitious visions and promises, including the goal of reaching one billion daily Xbox users. However, while those plans are still taking shape, Microsoft must also continue developing its next-generation Xbox hardware.
Xbox has already announced Project Helix, outlining plans for a next-generation ecosystem that could include multiple types of devices alongside its main console. However, it appears that the traditional home console will not be the first to arrive.
Next-Gen Xbox expected in late 2028
In an interview with Fortune, Sharma revealed that Microsoft's next-generation Xbox console is planned for late 2028. That would represent a delay compared with expectations that Microsoft might bring its next console to market earlier to gain an advantage over Sony's anticipated PlayStation 6.
Instead, Sharma indicated that players could see a new Xbox device in approximately a year — this time in a handheld form factor.
Microsoft has been exploring this direction for some time. Some of its plans have already taken shape through the ROG Xbox Ally, a handheld gaming PC developed in partnership with ASUS and launched in 2025.
However, the next handheld device is expected to be more distinctly Xbox-branded and could feature a newer hardware architecture.
Windows will power future Xbox hardware
Regardless of its form factor, the next Xbox generation is expected to use Windows as its operating system.
According to the Fortune report, integrating Windows into the Xbox hardware strategy has presented development challenges, partly because teams within the Xbox and Windows divisions have struggled to work together smoothly.
Nevertheless, Microsoft's broader plan remains to use Windows as the foundation for its future Xbox hardware.
This approach could help the company bring console gaming closer to the PC ecosystem, potentially allowing greater flexibility across different devices. The precise capabilities of future hardware, however, have yet to be officially confirmed.
Could the Next Xbox cost up to $1,800?
The biggest unanswered question is how much the next Xbox will cost.
Microsoft has not announced official pricing for either its next home console or a future Xbox-branded handheld. However, estimates mentioned in the report place the potential price of the next-generation console between $1,200 and $1,800.
If that range proves accurate, Microsoft's next Xbox could be significantly more expensive than traditional consoles, potentially positioning it closer to a high-end gaming PC.
For now, the reported release window and price range should be treated as estimates rather than confirmed specifications. More details about Project Helix and Microsoft's next-generation hardware strategy are expected as development progresses.
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