Higher than usual inflation can help explain some of the nominal price increases for the oldest Xbox consoles affected by today’s price hikes. The $300 for an Xbox Series S at launch in November 2020 is worth roughly $375 in August 2025 dollars, for instance. And the $500 for an Xbox Series X in 2020 is now worth about $625.
But the particularly sharp price increases for more recent Xbox configurations can’t really use that inflation excuse. The disc-drive-free Digital Xbox Series X Digital and 2TB “Galaxy Special Edition” are now a whopping 33 percent more expensive than they were at launch in October 2024. A year’s worth of inflation would account for only a small fraction of that.
We’ll see just how much the market can bear aging console hardware that increases in price over time rather than decreases. But until and unless consumers start balking, it looks like ever-increasing console prices are here to stay.
An Xbox-branded extension of Asus’ existing ROG Ally handheld line, the basic ROG Xbox Ally and more powerful ROG Xbox Ally X, both run a version of Windows 11 Home that’s been redesigned with a controller-first Xbox-style user interface. The idea is to preserve the wide game compatibility of Windows—and the wide compatibility with multiple storefronts, including Microsoft’s own, Valve’s Steam, the Epic Games Store, and more—while turning off all of the extra Windows desktop stuff and saving system resources. (This also means that, despite the Xbox branding, these handhelds play Windows PC games and not the Xbox versions.)
Microsoft and Asus initially announced the handhelds in June. Microsoft still isn’t sharing pricing information for either console, so it’s hard to say how their specs and features will stack up against the Steam Deck (starting at $399 for the LCD version, $549 for OLED), Nintendo’s Switch 2 ($450), or past Asus handhelds like the ROG Ally X ($800).
Both consoles share a 7-inch, 1080p IPS display with a 120 Hz refresh rate, Wi-Fi 6E, and Bluetooth 5.4 support, but their internals are quite a bit different. The lower-end Xbox Ally uses an AMD Ryzen Z2 A chip with a 4-core Zen 2-based CPU, an eight-core RDNA2-based GPU, 512GB of storage, and 16GB of LPDDR5X-6400—specs nearly identical to Valve’s 3-year-old Steam Deck. The Xbox Ally X includes a more interesting Ryzen AI Z2 Extreme with an 8-core Zen 5 CPU, a 16-core RDNA3.5 GPU, 1TB of storage, 24GB of LPDDR5X-8000, and a built-in neural processing unit (NPU).
The beefier hardware comes with a bigger battery—80 WHr in the Ally X, compared to 60 WHr in the regular Ally—and that also makes the Ally X around a tenth of a pound (or 45 grams) heavier than the Ally.
Microsoft is already highlighting its software advantage over SteamOS, promoting the Xbox Experience for Handhelds’ “aggregated game library” that can provide “access to games you can’t get elsewhere” through multiple Windows-based game launchers. There’s no reason to think that living room console players wouldn’t also be interested in that kind of no-compromise access to the full suite of Windows gaming options.
Microsoft has been preparing the Xbox brand for this ultimate merger between PC and console gaming for years, too. While the name “Xbox” was once synonymous with Microsoft’s console gaming efforts, that hasn’t been true since the launch of “Xbox on Windows 10” back in 2015 and the subsequent Windows Xbox app.
Meanwhile, offerings like Microsoft’s “Play Anywhere” initiative and the Xbox Game Pass for PC have gotten players used to purchases and subscriptions giving them access to games on both Xbox consoles and Windows PCs (not to mention cloud streaming to devices like smartphones). If your living room Xbox console simply played Windows games directly (along with your Windows-based handheld gaming PC), this sort of “Play Anywhere” promise becomes that much simpler to pull off without any need for porting effort from developers.
These are the kinds of thoughts that ran through my mind when I heard Bond say yesterday that Xbox is “working closely with the Windows team to ensure that Windows is the number one platform for gaming” while “building you a gaming platform that’s always with you so you can play the games you want across devices anywhere you want, delivering you an Xbox experience not locked to a single store or tied to one device.” That could simply be the kind of cross-market pablum we’re used to hearing from Microsoft. Or it could be a hint of a new world where Microsoft finally fully leverages its Windows gaming dominance into a new vision for a living room Xbox console.
One weakness of Valve’s Steam Deck gaming handheld and SteamOS is that, by default, they will only run Windows games from Steam that are supported by the platform’s Proton compatibility layer (plus the subset of games that run natively on Linux). It’s possible to install alternative game stores, and Proton’s compatibility is generally impressive, but SteamOS still isn’t a true drop-in replacement for Windows.
Microsoft and Asus’ co-developed ROG Xbox Ally is trying to offer PC gamers a more comprehensive compatibility solution that also preserves a SteamOS-like handheld UI by putting a new Xbox-branded user interface on top of traditional Windows. And while this interface will roll out to the ROG Xbox Ally first, Microsoft told The Verge that the interface would come to other Ally handhelds next and that something “similar” would be “rolling out to other Windows handhelds starting next year.”
Bringing a Steam Deck-style handheld-optimized user interface to Windows is something Microsoft has been experimenting with internally since at least 2022, when employees at an internal hackathon identified most of Windows’ handheld deficiencies in a slide deck about a proposed “Windows Handheld Mode.”
The mock-up “gaming shell” that some Microsoft employees were experimenting with in 2022 shares some similarities with the Xbox-branded interface we saw on the ROG Xbox Ally yesterday. Credit: Microsoft/Twitter user _h0x0d_
It’s not clear whether this new Xbox interface is a direct outgrowth of that slide presentation, but it pitches a tile-based Switch-style gamepad UI with some superficial similarities to what Microsoft revealed yesterday. This theoretical Handheld Mode would also have come with “optimizations for your handheld’s touch screen to improve touch points and visibility” and Windows’ “lack of controller support” outside of the Steam app and actual games.
On the ROG Xbox Ally, the new full-screen interface completely replaces the traditional desktop-and-taskbar interface of Windows, saving what Microsoft says is a couple of gigabytes’ worth of RAM while also using less energy and other system resources. On a handheld running the normal version of Windows, like the regular ROG Ally, that Windows overhead is joined by additional overhead from things like Asus’ Armoury Crate software, which these handhelds currently need to bridge the functionality gap between SteamOS and Windows.
The Windows-11-powered Xbox Ally devices promise access to “all of the games available on Windows,” including “games from Xbox, Game Pass, Battle.net, and other leading PC storefronts [read: Steam, Epic Games Store, Ubisoft Connect, etc].” But instead of having to install and boot up those games through the stock Windows interface, as you often do on handhelds like the original ROG Ally line, all these games will be available through what Microsoft is calling an “aggregated gaming library.”
Asus and Microsoft are stressing how that integrated experience can be used with games across multiple different Windows-based launchers, promising “access to games you can’t get elsewhere.” That could be seen as a subtle dig at SteamOS-powered devices like the Steam Deck, which can have significant trouble with certain titles that don’t play well with Steam and/or Linux for one reason or another. Microsoft also highlights how support apps like Discord, Twitch, and downloadable game mods will also be directly available via the Xbox Ally’s Windows backbone.
And while the Xbox Ally devices run Windows 11, they will boot to what Microsoft is calling the “Xbox Experience for Handheld,” a bespoke full-screen interface that hides the nitty-gritty of the Windows desktop by default. That gaming-focused interface will “minimize background activity and defer non-essential tasks,” meaning “more [and] higher framerates” for the games themselves, Microsoft says. A rhombus-shaped Xbox button located near the left stick will also launch an Xbox Game Bar overlay with quick access to functions like settings, performance metrics, and fast switching between titles. Microsoft also says it is working on a “Deck Verified”-style program for identifying Windows titles that “have been optimized for handhelds.”
Consoles like these may get banned from Nintendo’s online services, but they tend to still work offline.
Consoles like these may get banned from Nintendo’s online services, but they tend to still work offline. Credit: Kate Temkin / ReSwitched
“Unfortunately, ‘bricking’ personal devices to limit users’ rights and control their behavior is nothing new,” Electronic Frontier Foundation attorney Victoria Noble told Ars Technica. “It would likely take selective enforcement to rise to a problematic level [in court],” attorney Richard Hoeg said.
Last year, a collection of 17 consumer groups urged the Federal Trade Commission to take a look at the way companies use the so-called practice of “software tethering” to control a device’s hardware features after purchase. Thus far, though, the federal consumer watchdog has shown little interest in enforcing complaints against companies that do so.
“Companies should not use EULAs to strip people of rights that we normally associate with ownership, like the right to tinker with or modify their own personal devices,” Noble told Ars. “[Console] owners deserve the right to make otherwise legal modifications to their own devices without fear that a company will punish them by remotely bricking their [systems].”
The court of public opinion
In the end, these kinds of draconian bricking clauses may be doing their job even if the console makers involved don’t invoke them. “In practice, I expect this kind of thing is more about scaring people away from jailbreaking and modifying their systems and that Nintendo is unlikely to go about bricking large volumes of devices, even if they technically have the right to,” Loiterman said.
“Just because they put a remedy in the EULA doesn’t mean they will certainly use it either,” attorney Mark Methenitis said. “My suspicion is this is to go after the people who eventually succeeded in jailbreaking the original Switch and try to prevent that for the Switch 2.”
The threat of public backlash could also hold the console makers back from limiting the offline functionality of any hacked consoles. After citing public scrutiny that companies like Tesla, Keurig, and John Deere faced for limiting hardware via software updates, Methenitis said that he “would imagine Nintendo would suffer similar bad publicity if they push things too far.”
That said, legal capacities can sometimes tend to invite their own use. “If the ability is there, someone will want to ‘see how it goes.'” Hoeg said.
The ultimate handheld system seller. Credit: Microsoft / Bizarre Creations
Microsoft has made a lot of hay over the way recent Xbox consoles can play games dating all the way back to the original Xbox. If Microsoft wants to set its first gaming handheld apart, it should make those old console games officially available on a Windows-based system for the first time.
The ability to download previous console games dating back to the Xbox 360 era (or beyond) would be an instant “system seller” feature for any portable Xbox. While this wouldn’t be a trivial technical lift on Microsoft’s part, the same emulation layer that powers Xbox console backward compatibility could surely be ported to Windows with a little bit of work. That process might be easier with a specific branded portable, too, since Microsoft would be working with full knowledge of what hardware was being used.
If Microsoft can give us a way to play Geometry Wars 2 on the go without having to deal with finicky third-party emulators, we’ll be eternally grateful.
Multiple hardware tiers
One size does not fit all when it comes to consoles or to handhelds.
Credit: Sam Machkovech
One size does not fit all when it comes to consoles or to handhelds. Credit: Sam Machkovech
On the console side, Microsoft’s split simultaneous release of the Xbox Series S and X showed an understanding that not everyone wants to pay more money for the most powerful possible gaming hardware. Microsoft should extend this philosophy to gaming handhelds by releasing different tiers of portable Xbox hardware for price-conscious consumers.
Raw hardware power is the most obvious differentiator that could set a more expensive tier of Xbox portables apart from any cheaper options. But Microsoft could also offer portable options that reduce the overall bulk (a la the Nintendo Switch Lite) or offer relative improvements in screen size and quality (a la the Steam Deck OLED and Switch OLED).
“Made for Xbox”
It worked for Valve, it can work for Microsoft.
Credit: Valve
It worked for Valve, it can work for Microsoft. Credit: Valve
One of the best things about console gaming is that you can be confident any game you buy for a console will “just work” with your hardware. In the world of PC gaming handhelds, Valve has tried to replicate this with the “Deck Verified” program to highlight Steam games that are guaranteed to work in a portable setting.
Microsoft is well-positioned to work with game publishers to launch a similar program for its own Xbox-branded portable. There’s real value in offering gamers assurances that “Made for Xbox” PC games will “just work” on their Xbox-branded handheld.
This kind of verification system could also help simplify and clarify hardware requirements across different tiers of portable hardware power; any handheld marketed as “level 2” could play any games marketed as level 2 or below, for instance.
After a US court ruled earlier this week that Google must open its Play Store to allow for third-party app stores and alternative payment options, Microsoft is moving quickly to slide into this slightly ajar door.
Sarah Bond, president of Xbox, posted on X (formerly Twitter) Thursday evening that the ruling “will allow more choice and flexibility.” “Our mission is to allow more players to play on more devices so we are thrilled to share that starting in November, players will be able to play and purchase Xbox games directly from the Xbox App on Android,” Bond wrote.
Because the court order requires Google to stop forcing apps to use its own billing system and allow for third-party app stores inside Google Play itself, Microsoft now intends to offer Xbox games directly through its app. Most games will likely not run directly on Android, but a revamped Xbox Android app could also directly stream purchased or subscribed games to Android devices.
Until now, buying Xbox games (or most any game) on a mobile device has typically involved either navigating to a web-based store in a browser—while avoiding attempts by the phone to open a store’s official app—or simply using a different device entirely to buy the game, then playing or streaming it on the phone.
Bethesda’s Indiana Jones and The Great Circle is the latest game from a Microsoft subsidiary that will make its way to the PlayStation 5. The game will hit Sony’s console in the spring of 2025, Microsoft announced yesterday, months after a planned December launch on Xbox Series S/X and Windows.
In an interview with YouTube channel Xbox On, Microsoft’s Phil Spencer expanded on that decision, implying that multiplatform releases for Microsoft gaming properties were important to the Xbox division’s bottom line. “We run a business,” he said, “It’s definitely true inside of Microsoft the bar is high for us in terms of the delivery that we have to give back to the company, because we get a level of support from the company that’s just amazing in what we’re able to go do.”
Phil Spencer’s comments come about three minutes into this interview.
Amid massive layoffs that have hit Xbox and othergaming companies in recent months, Spencer noted that there’s “a lot of pressure on the [game] industry” these days. “[The industry] has been growing for a long, long time and now people are looking for ways to grow,” he said. “And I think that us, as fans, as players of games, we just have to anticipate there’s going to be more change in how some of the traditional ways that games were built and distributed [ars] going to change… for all of us.”
“It’s just going to be a strategy that works for us”
Although Microsoft released four former Xbox exclusives on other platforms months ago, Spencer suggested that there hasn’t been any commensurate dip in total Xbox usage. “What I see when I look is our franchises are getting stronger; our Xbox console players are as high this year as they’ve ever been,” he said.
“So I look at it, and I say, ‘Okay, our player numbers are going up for the console platform, our franchises are as strong as they’ve ever been… So I look at this [as] ‘How can we make our games as strong as possible?'” our platform continues to grow both on console on PC and on cloud and I think it’s just going to be a strategy that works for us.”
A big-budget, big-name Bethesda release like Indiana Jones could act as more of an Xbox system seller than the four older, smaller games that Microsoft recently let go multiplatform. Then again, The Great Circle‘s multiple months of Xbox exclusivity—which include the 2024 holiday buying season—could still provide a bit of a relative advantage for Microsoft’s consoles.
Indiana Jones and The Great Circle‘s PS5 availability may come as a particular surprise to readers who remember Spencer saying in February that neither The Great Circle nor Starfield were a part of the company’s current multiplatform plans. But a careful parsing of Spencer’s words at the time shows that he only promised those titles were not among the four multiplatform titles they were announcing at that time.
Back then, Spencer said that those four multiplatform releases didn’t represent “a change to our fundamental exclusive strategy.” But he added that there was a desire to “use what some of the other platforms have right now to help grow our franchises” to help “the long-term health of Xbox.”
“[I have] a fundamental belief that over the next five or ten years… games that are exclusive to one piece of hardware are going to be a smaller and smaller part of the game industry,” Spencer said in February.
The streaming-only Xbox would have looked like a smaller, squarer relative of the Series S.
Microsoft
The console had cutouts on the bottom and back, presumably for air cooling.
Microsoft
Front-mounted Xbox button and USB port, much like the Series S.
Microsoft
Rear-mounted Ethernet, HDMI, and power. The console would likely have worked over Wi-Fi, too, but wired Ethernet does help with latency and consistency when streaming games.
Microsoft
Controller sync button on the side.
Microsoft
There was a logo and a Series S-ish circle on the top of the Keystone Xbox, but there are no cutouts depicted, so this may have been a stylistic choice rather than a place for the console to vent hot air.
Microsoft
Microsoft’s mid-generation plans for the Xbox Series S and X consoles looked a whole lot different a couple of years ago than it does now. A leaked slide deck from the FTC v. Microsoft case last year outlined detailed plans for a spruced up Series S, an overhauled Series X, and even a redesigned controller. Another part of that roadmap included a streaming-only version of the Xbox, codenamed Keystone, that was designed to connect to Microsoft’s Xbox Cloud Gaming servers rather than rendering games locally.
Microsoft has talked openly about this version of the Xbox before. Microsoft Gaming CEO Phil Spencer told The Verge that the Keystone console was designed and fully functional, but that it wasn’t launched because Microsoft had a hard time getting the price down low enough that it made sense next to the $299 Series S (which already occasionally goes on sale in the $200 to $250 range).
We’ve already seen glimpses of Keystone—once on Spencer’s shelf, and again in the FTC v. Microsoft documents. Both of those depictions were partial, or seen from a distance. But a new design patent document (PDF) unearthed by Windows Central shows even more detailed renderings of what the cloud Xbox would have looked like.
Series S meets Apple TV
Keystone’s styling was strongly reminiscent of the disc-drive-less Series S, with the same boxy white design and front-mounted Xbox button and USB port. There’s also a similar circular cutout on top, though it may not be an air vent as it is in the Series S—all of the holes depicted in the patent are on the back and bottom, and a streaming box certainly wouldn’t have needed the same cooling capacity as the AMD-designed CPU and GPU in the Series S.
The console also would have been square-shaped and considerably smaller than a Series S—not quite as small as a dedicated video-streaming box like an Apple TV or Roku Ultra, but not too far off either (the patent document doesn’t list dimensions, but we’ve done a rough size comparison using the HDMI and Ethernet ports on the Keystone box and an Apple TV 4K). The console’s controller sync button would have been mounted on its side, rather than in front, as it is on the Series S.
Enlarge/ The cloud Xbox compared to a current-generation Apple TV 4K, with sizes roughly normalized based on the sizes of the HDMI and Ethernet ports. The Xbox console would have been a bit larger, but not dramatically so.
Apple/Microsoft/Andrew Cunningham
In the alternate reality of the FTC v. Microsoft slide deck, all of these new consoles and the new controller would have been announced or launched by now. But as Microsoft Gaming CEO Phil Spencer said shortly after those documents leaked, the company’s plans have changed substantially in the interim. A disc-less version of the Series X is coming, but it looks exactly like the current version of the console without a disc drive; Microsoft is also pursuing a strategy where it takes more of its internally developed games multi-platform, rather than restricting them to the Xbox and to Windows PCs. These moves are at least partially in response to sliding revenue from Microsoft’s console business, which has seen its revenue decline by double digits year over year for the last couple of years.
Neither Spencer nor Microsoft has ever said never about the Keystone console, leaving the door open to an eventual release if and when the price of manufacturing the console comes down. In the meantime, the streaming-only Xbox lives on as an app for newer Samsung smart TVs.
Enlarge/ Scale is important, especially when talking about relative console sales.
Aurich Lawson | Getty Images
Yesterday, Microsoft announced that it made 31 percent less off Xbox hardware in the first quarter of 2024 (ending in March) than it had the year before, a decrease it says was “driven by lower volume of consoles sold.” And that’s not because the console sold particularly well a year ago, either; Xbox hardware revenue for the first calendar quarter of 2023 was already down 30 percent from the previous year.
Those two data points speak to a console that is struggling to substantially increase its player base during a period that should, historically, be its strongest sales period. But getting wider context on those numbers is a bit difficult because of how Microsoft reports its Xbox sales numbers (i.e., only in terms of quarterly changes in total console hardware revenue). Comparing those annual shifts to the unit sales numbers that Nintendo and Sony report every quarter is not exactly simple.
Context clues
Enlarge/ Significant declines in Xbox hardware revenue for four of the last five quarters stand out relative to competitors’ unit sales.
Kyle Orland
To attempt some direct contextual comparison, we took unit sales numbers for some recent successful Sony and Nintendo consoles and converted them to Microsoft-style year-over-year percentage changes (aligned with the launch date for each console). For this analysis, we skipped over each console’s launch quarter, which contains less than three months of total sales (and often includes a lot of pent-up early adopter demand). We also skipped the first four quarters of a console’s life cycle, which don’t have a year-over-year comparison point from 12 months prior.
This still isn’t a perfect comparison. Unit sales don’t map directly to total hardware revenue due to things like inflation, remainder sales of Xbox One hardware, and price cuts/discounts (though the Xbox Series S/X, PS5, and Switch still have yet to see official price drops). It also doesn’t take into account the baseline sales levels from each console’s first year of sales, making total lifetime sales performance on the Xbox side hard to gauge (though recent data from a Take-Two investment call suggests the Xbox Series S/X has been heavily outsold by the PS5, at this point).
Even with all those caveats, the comparative data trends are pretty clear. At the start of their fourth full year on the market, recent successful consoles have been enjoying a general upswing in their year-over-year sales. Microsoft stands out as a major outlier, making less revenue from Xbox hardware in four of the last five quarters on a year-over-year basis.
Those numbers suggest that the hardware sales rate for the Xbox Series S/X may have already peaked in the last year or two. That would be historically early for a console of this type; previous Ars analyses have shown PlayStation consoles generally see their sales peaks in their fourth or fifth year of life, and Nintendo portables have shown a similar sales trend, historically. The Xbox Series S/X progression, on the other hand, looks more similar to that of the Wii U, which was already deep in a “death spiral” at a similar point in its commercial life.
This is not the end
In the past, console sales trends like these would have been the sign of a hardware maker’s wider struggles to stay afloat in the gaming business. However, in today’s gaming market, Microsoft is in a place where console sales are not strictly required for overall success.
For instance, Microsoft’s total gaming revenue for the latest reported quarter was up 51 percent, thanks in large part to the “net impact from the Activision Blizzard acquisition.” Even before that (very expensive) merger was completed, Microsoft’s total gaming revenue was often partially buoyed by “growth in Game Pass” and strong “software content” sales across PC and other platforms.
Enlarge/ Owning Call of Duty means being one of the biggest PS5 game publishers almost by definition.
So, while the commercial future of Xbox hardware may look a bit uncertain, the future of Microsoft’s overall gaming business is in much less dire straits. That would be true even if Microsoft’s Xbox hardware revenue fell by 100 percent.
Enlarge/ The Meta Quest Pro at a Best Buy demo station in October 2022.
Meta will open up the operating system that runs on its Quest mixed reality headsets to other technology companies, it announced today.
What was previously simply called Quest software will be called Horizon OS, and the goal will be to move beyond the general-use Quest devices to more purpose-specific devices, according to an Instagram video from Meta CEO Mark Zuckerberg.
There will be headsets focused purely on watching TV and movies on virtual screens, with the emphasis on high-end OLED displays. There will also be headsets that are designed to be as light as possible at the expense of performance for productivity and exercise uses. And there will be gaming-oriented ones.
The announcement named three partners to start. Asus will produce a gaming headset under its Republic of Gamers (ROG) brand, Lenovo will make general purpose headsets with an emphasize on “productivity, learning, and entertainment,” and Xbox and Meta will team up to deliver a special edition of the Meta Quest that will come bundled with an Xbox controller and Xbox Cloud Gaming and Game Pass.
Users running Horizon OS devices from different manufacturers will be able to stay connected in the operating system’s social layer of “identities, avatars, social graphs, and friend groups” and will be able to enjoy shared virtual spaces together across devices.
The announcement comes after Meta became an early leader in the relatively small but interesting consumer mixed reality space but with diminishing returns on new devices as the market saturates.
Further, Apple recently entered the fray with its Vision Pro headset. The Vision Pro is not really a direct competitor to Meta’s Quest devices today—it’s far more expensive and loaded with higher-end tech—but it may only be the opening volley in a long competition between the companies.
Meta’s decision to make Horizon OS a more open platform for partner OEMs in the face of Apple’s usual focus on owning and integrating as much of the software, hardware, and services in its device as it can mirrors the smartphone market. There, Google’s Android (on which Horizon OS is based) runs on a variety of devices from a wide range of companies, while Apple’s iOS runs only on Apple’s own iPhones.
Meta also says it is working on a new spatial app framework to make it easier for developers with experience on mobile to start making mixed reality apps for Horizon OS and that it will start “removing the barriers between the Meta Horizon Store and App Lab, which lets any developer who meets basic technical and content requirements release software on the platform.”
Pricing, specs, and release dates have not been announced for any of the new devices. Zuckerberg admitted it’s “probably going to take a couple of years” for this ecosystem of hardware devices to roll out.
