Xbox Reportedly Plans 2027 Handheld, 2028 Console

The next Xbox console could cost buyers between $1,200 and $1,800. That is the figure Microsoft has projected internally for Project Helix, according to a Fortune profile of Xbox chief executive Asha Sharma published on 20 October, unless the company decides to subsidise the hardware.

Fortune also lays out the timetable. Sharma “plans to release a next-generation handheld device by the 2027 holiday season and the next console by the holidays in 2028,” it reports. Microsoft has announced neither device’s date nor price, but the profile shows a hardware roadmap being set while the business behind it is cut back and reorganised.

In brief

Fortune reports an Xbox handheld for holiday 2027 and the Project Helix console for holiday 2028, with an internal price projection of $1,200 to $1,800 for Helix unless Microsoft subsidises it.
Xbox and Windows teams clashed over the handheld’s software, and Xbox now largely controls the operating system’s direction, according to Fortune’s sources.
Sharma has cut 1,868 jobs towards a 3,200 reduction, with more rounds planned; Microsoft has confirmed none of the hardware plans.

A price that depends on a subsidy

The projected range would put Helix far above what console buyers are used to, and Fortune ties it to Xbox’s wider troubles: higher hardware costs driven by memory chip shortages, and current-generation Xbox consoles that have sold a little over a third as many units as the PlayStation 5, by third-party estimates. A Microsoft measure of the unit’s profit margin has been around 3%, Fortune reports, a third to a tenth of rivals’ levels.

Whether Microsoft absorbs part of the cost is the open variable. Piers Harding-Rolls, a gaming analyst at Ampere Analysis, told Fortune the global console market remains capped at roughly 200 million users per generation, with younger players largely choosing mobile, PC and platforms such as Roblox over dedicated home consoles.

The Verge, following up on the report, notes that it is not clear whether the handheld would be built by a partner such as Asus, which made the Xbox Ally devices, or by Microsoft itself. Sharma has described Project Helix as a “family of devices”, and Microsoft and AMD announced a “strategic multi-year partnership” last year covering a portfolio of devices including the next console.

Xbox won a software fight with Windows

The handheld exposed an old rivalry inside Microsoft. Windows leaders wanted an upcoming handheld to run a trimmed-down version of Windows Home, while Sharma’s team wanted to build and control its own software for gaming performance, Fortune reports. Tensions ran high enough that a senior Xbox executive threatened to scrap the handheld project rather than adopt the Windows build, according to people briefed on the clash.

“Xbox is now largely controlling the direction of the operating system for the project,” Fortune says, though Sharma stressed that the teams still work together closely. “We can’t build Helix on our own,” she said. People familiar with the matter also told Fortune that engineering deadlines for Helix have been moved up by at least several months, adding pressure on developers, including to use AI.

The hardware push comes alongside deep cuts

Sharma, who took over from Phil Spencer in February, is running the roadmap while shrinking the organisation. “So far, Sharma has cut 1,868 people as part of plans to reduce headcount by 3,200 during the next year,” Fortune reports, with the next rounds planned “for this month, November, and January, people familiar with the plans said, although layoff plans can change.” Fortune also reports a planned Game Pass overhaul that would let players pick features à la carte, citing people familiar with the strategy.

The cuts have fed speculation that Xbox is being readied for a sale or spin-off, which Fortune says some current and former staff believe. Judson Althoff, who runs Microsoft’s commercial business, rejected that reading. “Asha is one of the best leaders we have at the whole company. We would not have put her on a business we intend to sell,” he told the magazine. “There’s going to be a ton of speculation about all this. Time will tell.”

The business is already under pressure at home: Circana data showed US Xbox hardware unit sales down 33% in 2026 through August, as TSN reported. Sharma has also set up Xbox Labs to explore AI-assisted game porting.

The handheld is the nearer test

Of the two devices, the handheld is due first, and it was the handheld’s software that Xbox and Windows fought over, so its launch should be the first look at what Xbox’s control of the operating system produces. Before that, Fortune points to a closer milestone: Microsoft’s quarterly earnings report later this month, the first public read on whether Sharma’s changes are showing up in the numbers.