Microsoft (MSFT.US) plans to launch an Xbox handheld console in 2027, with the next-generation console arriving in 2028 and possibly priced as high as $1,800.

According to Golden Ten Data, Microsoft (MSFT.US) is accelerating its deployment of the next-generation gaming hardware lineup. Reportedly, Microsoft plans to launch an Xbox handheld device during the 2027 holiday season and roll out the next-generation Xbox console, codenamed “Project Helix”, in the 2028 holiday season.

It is reported that the new console, codenamed “Project Helix”, will use AMD (AMD.US)’s FSR 4.1 machine learning technology. Xbox CEO Asha Sharma describes Project Helix as “a series of devices”, suggesting that Microsoft’s future hardware ecosystem will no longer be limited to a single form factor. Combined with the “multi-year strategic partnership” Microsoft formed with AMD last year, this series of devices is likely to be built on AMD’s new chips. The report also states that if Microsoft does not subsidize the hardware, the next-generation console could be priced as high as $1,200 to $1,800.

On the software development front, there were disagreements within Microsoft between the Windows team and the Xbox team over who would lead the system for the next-generation devices. Given that similar tensions have arisen repeatedly between the two teams over the past 25 years, this conflict is not surprising. However, the current information indicates that the Xbox team has regained control over the software direction of Project Helix.

In addition, Xbox’s core subscription service, Game Pass, is also facing major changes. Reports state that Microsoft is taking inspiration from the Netflix model to reform Game Pass’s tier structure, planning to introduce multiple options with or without ads, and considering add-on service packages for console exclusives, cloud gaming, and multiplayer modes. This will increase the service’s flexibility, but whether major games will be included at launch and any changes to overall prices remain uncertain.

One of Sharma’s first actions in her new role was to fix Game Pass’s pricing strategy. She admitted internally that “Game Pass is too expensive for players.” Microsoft subsequently not only lowered the subscription price but also cancelled the day-one release of the new Call of Duty title on Game Pass. In addition, Sharma plans to launch a new round of Xbox layoffs this month, with further layoffs scheduled for November and January.

Under Sharma’s leadership, the Xbox management team has been devoted to improving the division’s operations and speeding up its growth. The division has around 14,000 employees, but in recent years has suffered from extremely low profit margins and declining sales. In the fiscal year ending in June, Xbox’s revenue dropped by 7% to $21.8 billion. According to Microsoft’s disclosures earlier this year, the division’s “controllable profit margin” (similar to adjusted profit margin) has continued to decline over the past year, falling to just 3% as of June.

Previously, Microsoft hoped to generate significant new revenue by acquiring numerous game studios, but the actual results did not meet expectations. Since taking over the division in February this year, Sharma has been focused on reversing its downward trajectory. Reports suggest that in July, she proposed a plan to cut 3,200 jobs (about 20% of the total workforce) over the next year and increase investment in game IPs such as Halo and Minecraft.

Notably, according to insiders, several private equity firms have considered the possibility of acquiring Microsoft’s Xbox gaming business in recent months. Should a deal take place, the business could be valued at $100 billion to $150 billion. These sources indicate that the private equity discussions are only in the early exploratory phase and have not developed into formal negotiations with Microsoft. However, this also shows that if Microsoft struggles to turn around its troubled gaming business, the company could still find a buyer. In response, a Microsoft spokesperson stated in a press release: “Xbox is not for sale,” and declined to comment further.