We didn’t get a preview of Project Helix at Xbox recent summer showcase. Part of that could be because the current cost crisis around PC gaming components is sparking tough discussions at Microsoft about what kind of console it can deliver in 2027, the price of which isn’t immediately irrelevant. Asha Sharma, CEO of Xbox recently hinted that the company will have to get creative in order to make the next generation of consoles something fans can still get behind.
“I think we will continue to look for new business models,” she said recently. Fortune during one of his live events. “I think what’s needed for consoles, rather than the highest-end, best-performing console in the world, I think we’ve reached a point where it’s going to be hard to imagine that the general public can afford to spend thousands of dollars on a generation of consoles, and so I think we’ll start to see radically different business models that we never imagined start to come into orbit later this year.”
What could these new economic models be? An Xbox that costs less if you sign up for ads? Next-generation hardware upgrades subsidized by subscription, like Microsoft used to do with its Unlimited Access program? Less powerful hardware that leverages cloud streaming and AI to deliver peak performance without needing expensive components inside the box to do it locally? Here are some clues offered by Sharma.
“I think we need to think very differently about storage and memory in the future,” she said. “We will have to apply new techniques to be able to compress that. We will have to allow customers to have very flexible storage offerings. We will have to offer new types of games, so that they can adapt to devices, and so there will be a lot of innovation.”
Sharma has previously highlighted the gaming affordability crisis as one of the biggest challenges heading into the new hardware cycle. She said one of her main tasks at the moment is to determine what trade-offs need to be made so that Propeller Project can succeed in a world where component prices rise exponentially rather than fall.
Exclusives are back, but only if Xbox is “healthy” The new Xbox CEO also gave new insight into her view of exclusivity, the hot topic of the summer showcase, where Microsoft revealed its decision a month ago not to put Gears of War: E-Day on PlayStation 5. When asked about the future of Xbox exclusives, Sharma suggested that they were a priority, but also something that was costing the platform on the publishing side, forcing her team to be somewhat stingy in holding back games to support the Xbox console ecosystem.
“I think we’re the second-largest publisher in the world, and when you do that, you want your games to be everywhere,” Sharma said. “You are stronger when the world plays with you. At the same time, we are becoming more and more of a platform, and it is difficult to find examples of platforms that do not offer exclusive services and content.”
She continued: “So it’s a journey for us. Our business is not particularly healthy as you’ve noted, and so we’re starting by introducing one or two signature exclusives and, as the business is healthy, we’ll look to try to do more.”
It certainly makes the return of a certain level of exclusivity feel like an experience, not a promise. If it generates advantages with disadvantages that can be offset by the rest of the company, the experiment will continue. But if Game Pass, hardware revenue and game sales are still struggling in a few years, the strategy could shift away from exclusives. It doesn’t seem confusing or chaotic at all.