Key members of Xbox’s senior management team seem to be quite interested in the Xbox handheld, but will the company approve even riskier hardware?
View Gallery – 3 images
Hardware is not Xbox’s forte. Unlike the other Big 3 (Sony and Nintendo), Xbox does not sell its consoles at a profit. In fact, Microsoft has never sold an Xbox at a profit. It’s estimated that the company is losing up to $200 per Xbox Series X sold. And yet Microsoft continues to make Xbox consoles because they are a key pathway into the company’s $18.5 billion content and services market. The new Xbox Series X/S duo launching this holiday season is proof of this, especially with their new higher price tags that help offset losses.
So… Xbox finds itself at an interesting crossroads. While the Xbox division is looking to expand into every vector and platform, there’s one area where Xbox has been relatively absent: handhelds. Major OEMs like Valve, Lenovo, MSI, and ASUS have created new hardware market segments with their respective handheld PCs, in no small part due to the best-selling Nintendo Switch.
Will Xbox make a handheld? A new report from Bloomberg touches on the topic, with Xbox President Sarah Bond making an indirect comment about an Xbox handheld.
CEO Phil Spencer reiterated his love for PCs on the go:
“What do we need to build to find new players and be able to play when we can’t go play? [before]???
There have also been reports that Xbox may have experimented with a prototype of the portable hardware.
Related article: Opinion: What does the future hold for Xbox console hardware?
But Microsoft hasn’t confirmed anything, and judging by trends, it may be hard for Xbox executives to convince the board, CFO Amy Hood, and possibly other company executives that an Xbox handheld is a good idea. So far, Xbox has only partnered with handheld makers, such as with Logitech on its cloud-only G Cloud handheld.
Remember that Microsoft just acquired Activision Blizzard King for $70 billion, and while Xbox has delivered a record-breaking $21.5 billion in annual revenue with the backing of ABK in the last nine months, hardware revenues are at their lowest since the launch of the Xbox Series X/S duo.
At the same time, lower hardware revenues also mean that losses from hardware sales may be reduced – assuming of course that this is reflected up the supply chain/production to consumer chain.
On the hardware side, Microsoft is currently preparing its next-generation Xbox console, which president Sarah Bond has said will “deliver the biggest technological leap” in the history of console gaming.
Whether an official Microsoft-branded Xbox handheld ever becomes a reality will ultimately depend on the risk-reward ratio and how such new hardware fits into the division’s budget, especially with the added burden and pressure of delivering high revenues reflecting the $70 billion Activision merger.