Xbox CEO Signals the Potential of Cheaper Next-Gen Hardware as she Admits it’s “Hard to Imagine” Players Affording $1K+ Consoles

Xbox's new chief executive officer Asha Sharma continues to spend the beginning of her tenure undoing the decisions of the previous regime. After Sarah Bond described the next generation of Xbox as a "very premium, very high-end, curated experience," Sharma is relaying a seemingly more realistic message. One where she and her regime understand that players will likely neither be willing nor capable of spending thousands of dollars on new hardware, and that the platform will need to try something other than just trying to deliver a 'high-end, premium experience.'

This is another comment that comes from Sharma's recent Fortune Conversations interview, where she also made some significant comments about the strategy for exclusive games, which you can read about here. Focusing on the hardware, Sharma was more frank on the state of Xbox's hardware situation than we ever really saw from the previous regime.

"On hardware, we are in a crisis right now," Sharma said. "The entire industry is, the costs are exponential. They are usually, at this point in the generation, about 50% of the [launch] cost, and we're seeing they're up 2.75x. So yes, pricing is a lever, of course, but we must think about other options as well."

"We will continue to look at new business models," Sharma adds. "I think [that] is what is needed for console, rather than just the most premium, high-performance console in the world. We've reached a point where it will be hard to image that mass audiences can afford thousands of dollars to spend on a console generation and so I think we will start to see radically different business models that we never expected to come into orbit later this year."

As to what those business models look like, Sharma didn't say, but her comments are still very significant, particularly when stacked against what Bond and the rest of Phil Spencer's regime were saying before they left.

While it's worth noting that Sharma did reiterate that Project Helix will do all the things we've previously heard, like let users play their PC games, support backwards compatibility and be a performance-leading console, she didn't stop there, adding that Xbox has work to do to make the device more appealing beyond those reasons. After all, it's not worth very much to have the highest of high-end products if the mass audiences you're trying to sell it to can't afford it.

When Bond called what we now know as Project Helix a "very premium, very high-end" device, it was met with a lot of concern from users who felt they were being priced out of Xbox consoles, and that Xbox's executives were out of touch with reality. Of course, Team Green isn't alone in their hardware pricing struggles. Every platform maker has raised the price of its current hardware offering, with the Nintendo Switch 2 price hike going into effect this coming September.

Perhaps we're in for another Xbox Series S situation, where a cheaper hardware offering is meant to be the more mass-market option, while enthusiasts who are perhaps looking at a new console as a decade-plus investment in their gaming habit can go for the higher-end device. But that hasn't exactly panned out the way Xbox would've hoped, and by the sounds of it, Sharma and her team will try more than just offering two console variants.

Whatever happens, it's at least a positive note that Sharma and her team realize that a new approach is needed. A sentiment we also heard from Xbox's chief strategy officer, Matthew Ball, just days ago.

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