Alright, let’s talk about the future of Xbox hardware, straight from the top. Satya Nadella, Microsoft’s CEO, has been quite vocal about his vision for the next Xbox, and it sounds like a significant evolution rather than a traditional console iteration.

Nadella has repeatedly emphasized that Microsoft aims to “do innovative work on the system side on the console and on the PC.” He finds it “kind of funny that people think about the console and PC as two different things,” explaining that Xbox consoles were initially built to be “a better PC, which could then perform for gaming.” This suggests a strong lean towards blurring the lines between console and PC gaming with the next hardware. He explicitly stated, “I kind of want to revisit some of that conventional wisdom.”

Despite this PC-centric direction, Nadella still acknowledges the unique value of consoles, stating that “console has an experience that is unparalleled. It delivers performance that’s unparalleled, that pushes, I think, the system forward.” He is “really looking forward to the next console, the next PC gaming.”

The broader strategy underpinning this hardware vision is Microsoft’s goal to be a “fantastic publisher” that is “everywhere, on every platform.” This means ensuring games are enjoyed by players across consoles, PC, mobile, cloud gaming, and TV. Nadella also pointed out that “the biggest gaming business is the Windows business,” highlighting the importance of PC gaming to Microsoft’s overall strategy.

Interestingly, Nadella views gaming’s primary competition not as other gaming platforms, but as “short-form video.” This perspective suggests a drive to innovate in interactive media and business models to capture player attention. He also linked innovation to maintaining “good margins” to fund future developments.

Reports and comments from other Xbox executives, like Sarah Bond, further support this direction, describing the next Xbox as a “very premium, very high-end curated experience.” There are strong indications that the next Xbox will be Windows-based, capable of running PC games, including those from other platforms like PlayStation titles released on Steam. This would allow the device to incorporate decades of Windows and Xbox games on a single piece of hardware.

In essence, Nadella’s statements paint a picture of a future Xbox that is a powerful, innovative, and highly versatile gaming device, blurring the lines between a traditional console and a PC, and designed to deliver a premium, curated gaming experience across a broad ecosystem.