Microsoft is looking beyond traditional console cycles, forging a long-term partnership with AMD to develop the custom silicon that will power the next generation of Xbox devices.
This collaboration goes far deeper than designing a single chipset; it’s a multi-year effort to co-develop the foundational hardware that will drive Xbox consoles, handhelds, and cloud-connected platforms for years to come.
Unified Hardware is Next Gen
At the center of this partnership is a unified hardware strategy. Microsoft and AMD are working together to create CPUs, GPUs, and AI-focused processors tailored specifically for Xbox’s evolving needs. This includes a new custom-built Neural Processing Unit (NPU), which will allow future Xbox devices to perform complex AI tasks.
We expect to see things such as advanced image enhancement, world simulation, and smarter character behavior, directly on the hardware. These chips will be optimized not only for performance but also for integration with cloud services and multiple device types.
Xbox President Sarah Bond, who has taken a leading role in communicating Microsoft’s vision, has emphasized that this new hardware platform will be designed to support a more open ecosystem. Future Xbox experiences won’t be tied to a single device or restricted to Microsoft’s own digital storefronts.
Instead, the company aims to create a system where players can access their games across a wide range of devices. These include high-performance consoles and PC rigs, to handhelds and cloud streaming endpoints.
Preparing for the Future with Xbox
This strategy is already beginning to take shape. Microsoft recently supported the development of the ASUS ROG Xbox Ally X, a powerful handheld PC that was known internally as Project Keenan. Though not an Xbox product in name, the Ally X is a clear example of how Microsoft’s gaming services and Windows-based tools can extend to new types of hardware, especially with AMD at the heart of the experience.
Importantly, Microsoft is not leaving its current players behind. The next generation of Xbox devices will preserve compatibility with existing game libraries, continuing the company’s trend of making older titles playable on newer systems. That continuity is key to keeping players invested while the platform evolves.
By combining AMD’s engineering expertise with Microsoft’s cross-platform ambitions, this partnership signals a major shift in how the Xbox brand will grow. Instead of being defined by a console, Xbox is positioning itself as a connected platform ready whenever, wherever, and however gamers choose to play.
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