Fair attendees play at the Xbox booth at the Cologne Trade Fair Center during the first day of Gamescom 2025 on August 20, 2025 in Cologne, Germany.
Ying Tan | Null Photo | Getty Images
microsoft The company announced Wednesday that it will send prototypes of its next-generation Xbox console to video game developers in 2027, in an effort to close the gap with Nintendo and Sony.
The hardware will be equipped with a custom chip. advanced micro deviceJason Ronald, vice president of Microsoft’s Xbox division, said in a blog post.
“This increases the performance and capabilities of ray tracing by orders of magnitude, integrating intelligence directly into the graphics and compute pipeline, and significantly increasing efficiency, scale, and visual ambitions,” Ronald wrote. “The result is a more realistic, immersive and dynamic world for players.”
Microsoft’s announcement comes weeks after the company announced that longtime gaming head Phil Spencer would be stepping down and being replaced by artificial intelligence head Asha Sharma. In a message to employees, Sharma said the company will take a new approach to Xbox, starting with console gaming.
Just over 7% of Microsoft’s revenue in the December quarter came from games, and Xbox hardware revenue fell 32%. The company recorded an unspecified impairment charge in its gaming business during the quarter.
Since the introduction of the flagship Xbox Series X and more affordable Series S in 2020, Xbox consoles have outsold alternatives from Nintendo and Sony, according to estimates from video game website VGChartz. In the fall, ASUS released an Xbox-branded handheld device.
The Xbox Series S and X, which were first released in 2020, also had AMD processors.
“We are pleased to share our plans to ship alpha versions of our hardware to developers starting in 2027,” Ronald wrote.
Microsoft is reportedly pushing profit margins for its video game division to reach 30%. Last year, the company laid off some employees and scrapped titles in development.
Sharma mentioned the next-generation console, known internally as Project Helix, in an X post last week.
“Project Helix will lead in performance and play Xbox and PC games,” she wrote.
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