Xbox’s Project Hail Mary

TL;DR: Microsoft confirmed its next-gen Xbox console yesterday, saying it will play both Xbox and PC games. It’s pitching it as the brand's triumphant return after over a decade of plunging sales. With the growth of cloud gaming and a similar machine from Valve on the horizon, a new era of platform-agnostic gaming may be coming.

What happened: Xbox has undergone huge leadership shakeups in the last month. Longtime gaming chief Phil Spencer retired and Xbox president Sarah Bond resigned in late February. The abrupt double departure led Xbox co-creator Seamus Blackley to speculate that Microsoft was "sunsetting" its gaming division, calling incoming CEO Asha Sharma, who joined the company in 2024 to focus on AI, "a palliative care doctor who slides Xbox gently into the night."

Yesterday, Sharma gave her reply with a major announcement: Not only is Xbox not going away, but its next console, codenamed Project Helix, will play both Xbox and PC games. It's a big swing for a brand that desperately needs a win.

Xbox’s long flop era: Microsoft's gaming console has tumbled from once-great heights. Just around 2.5 million Xbox Series X and S units sold in 2025, compared to roughly 17.4 million PS5s in the same window. Meanwhile, over 15 million Switch 2 consoles flew off the shelves last year after its release in June. Microsoft’s console heyday was the Xbox 360, released in 2005, which sold 85 million units in its lifetime. It’s been on a downslide ever since, accelerated by a drought of must-play exclusives.

The big question: The headline feature and some beefy rumored specs may whet appetites, but real excitement hinges on one thing: cost. There's no word on Project Helix pricing yet, and the Steam Machine—Valve's similar console—has been delayed as the company reworks its numbers around soaring RAM and component costs. Console prices could jump as much as 69% due to tariffs, per the Consumer Technology Association.

Are exclusives a thing of the past?: Exclusive games only available on one console have been a key strategy for selling hardware for decades. But Microsoft has been giving its own away. Recently, it even revealed that Halo, one of its most prized franchises, is heading to Sony’s gaming machine next.

The rest of the console makers aren't taking this same tack. Sony spent six years porting hits like God of War and Spider-Man to PC, but recently reversed course: Single-player PlayStation exclusives are staying put. Nintendo has never budged on locking down franchise titles like Mario and Zelda.

The console vs. PC war gets blurry: While Sony and Nintendo keep duking it out over exclusives, Microsoft and Valve will have to prove a cross-platform strategy can succeed. It's more consumer-friendly—you won't have to choose one platform or buy multiple versions of games (something cloud gaming subscriptions have been helping with for years). But console revenue still tops PC's, in part because it's a closed system: You'll pay the $70-$80 Sony and Nintendo charge for that new release (Pokémon Pokopia, anyone?). PC gaming, meanwhile, has countless stores vying for attention with frequent and steep discounts. But the timing is right for Microsoft and Valve to go all in on this tactic: Growth in PC gamers is outpacing consoles, with concurrent players on Steam hitting a record 42 million in January, compared to a record of 25 million in 2021.

What comes next: Project Helix could offer the Windows/Xbox store, or also welcome Steam, Epic, and other PC marketplaces as has been rumored. Microsoft will likely share more at the Game Developers Conference next week. Tariff math and limited access to components could continue to complicate launches for both Microsoft and Valve.

Bottom line: If the cross-platform gaming ploy can hit the right price, the era of buying a specific box to play specific games might finally be fading. Though, if Jeff Bezos has his way, we’ll all be renting gaming PCs from the cloud. —WK