New Xbox Could Cost $1,200 to $1,800 and Launch in 2028, as Microsoft Plans Game Pass Overhaul

A new in-depth report by Fortune reveals planned changes at Microsoft’s gaming division. New Xbox chief Asha Sharma is planning a major overhaul of the Game Pass subscription, the release of a handheld Xbox in 2027, and a new console in 2028. The console, however, could be extremely expensive.

New Xbox Could Cost Up to $1,800

According to Microsoft’s internal estimates, the upcoming Project Helix console could cost customers between $1,200 and $1,800. Such a price is expected if Microsoft does not subsidize the hardware and decides to pass manufacturing costs on to customers.

For now, these are only internal projections, not a final price. Microsoft still has room to change its pricing strategy. According to the report, the new console is currently planned for late 2028, while the company wants to offer its own next-generation handheld during the 2027 holiday season.

Game Pass Set for Major Overhaul

Xbox Game Pass is also expected to undergo significant changes. Microsoft is reportedly preparing a more flexible subscription model in which users could choose individual features according to their needs, with the final price calculated accordingly.

Standalone add-ons could include access to console games, cloud gaming, or online multiplayer. The service would continue to offer different subscription tiers, but players would have more control over which features they pay for.

The aim is to change the service’s economics. According to former Microsoft employees, it has driven subscription growth but also negatively affected sales of some major games.

Conflict Between Xbox and Windows

The report also reveals significant disagreements between the Xbox and Windows teams over the development of the next generation of hardware.

The Windows division wanted the upcoming handheld to use a modified, lightweight version of Windows Home. The Xbox team, however, pushed for its own software solution, which it would have more control over and could optimize for maximum gaming performance.

According to the report, the situation escalated to the point that a senior Xbox executive threatened to cancel the handheld if it had to use the proposed version of Windows. Fortune reports that Xbox now has more control over the operating system’s direction for the new hardware, although the two teams continue to work together.

More Layoffs Planned

Asha Sharma is also continuing a major restructuring of the gaming division. So far, 1,868 employees have reportedly lost their jobs as part of her plans, with total cuts expected to affect approximately 3,200 positions. According to Fortune’s sources, further rounds of layoffs are planned for October and November 2026, and January 2027. The dates could still change.

Microsoft is also shifting investment away from smaller studios and toward its biggest franchises, and wants to increase the frequency of major game releases. The new leadership is also requiring studios to demonstrate the commercial potential of upcoming projects more clearly.

The overall strategy points to a major transformation of Xbox. Microsoft wants to strengthen its own hardware, change Game Pass’s business model, and make greater use of its strongest franchises. It remains unclear, however, whether the upcoming console, with a potential price of up to $1,800, can succeed in the mass market.

The dates, prices, and internal plans currently come from Fortune’s sources and have not been officially confirmed by Microsoft. Also, even if they are relevant today, everything could be delayed or changed.

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