Microsoft is pursuing a significantly more ambitious vision for its next-generation Xbox than previous console launches, potentially transforming the gaming experience by deeply integrating PC capabilities. Recent statements from Epic Games suggest the Epic Games Store will be available “day one” on the upcoming Xbox, signaling a major shift in the traditionally walled-garden console ecosystem.
Expanding the Xbox Ecosystem: Epic Games Store and Beyond
According to Epic Games manager Steve Allison, Microsoft is receptive to the idea of integrating the Epic Games Store onto the next-gen Xbox. Epic plans to be “there from the start,” though a dedicated app from Microsoft will need to be developed to facilitate this (Windows Central). Currently, the Epic Games Store boasts around 67 million monthly active users and recently generated $400 million in revenue from third-party games. Epic intends to continue its free games program, viewing it as a core component of its identity.
Steam, AMD, and a 2027 Launch – Best Case Scenario
The integration of the Epic Games Store aligns with earlier statements from both Microsoft, and AMD. Both companies confirmed in 2025 their collaboration on a new Xbox that will be compatible with Steam and offer backward compatibility with existing Xbox games. AMD CEO Lisa Su recently reiterated that development of a semi-custom SoC is progressing well and supports a 2027 launch. However, internally, 2027 remains a “best-case scenario,” contingent on further refinement of the underlying operating system.
Specifically, Microsoft is awaiting improvements to Windows 11, which will serve as the foundation for the next-generation Xbox’s operating system. This suggests the console’s success isn’t solely dependent on hardware advancements but also on delivering a polished software experience. The company publicly confirmed its partnership with AMD on the next-generation Xbox project last year.
A Windows 11-Powered Console: Blurring the Lines Between PC and Console
Reports indicate the next-gen Xbox will essentially function as a Windows 11 gaming PC, albeit with a console-first interface designed for television use. This represents a significant departure from traditional console architecture. Users will be able to exit the console interface and access the full Windows environment, similar to the Steam Deck, allowing them to run a wide range of programs and accessories. This opens the possibility of transforming the Xbox into a streaming PC, coding station, or music production studio, extending its functionality far beyond gaming.
The console is expected to support running games from multiple storefronts, including Steam and the Epic Games Store, in addition to Microsoft’s own Xbox Store. This move towards a more open ecosystem contrasts with the historically closed nature of console platforms. The Xbox ROG Ally handheld is cited as an early indication of the next-gen Xbox console formula, showcasing the potential of a Windows-based gaming experience.
OEM Xbox Consoles and a Modular Future?
Further reports suggest Microsoft is exploring a modular hardware approach, potentially allowing original equipment manufacturers (OEMs) like Asus to create their own Xbox consoles. This could lead to a range of Xbox devices, from budget-friendly entry-level models to premium, high-performance machines. This strategy mirrors the PC market, where various manufacturers offer systems based on standardized components. The potential for first-party handheld devices is also being explored.
This ambitious plan, however, is not without its risks. The success of the next-gen Xbox hinges on the stability and performance of Windows 11, as well as the ability to seamlessly integrate multiple storefronts and maintain backward compatibility. The company’s president, Sarah Bond, stated in 2024 that Microsoft is “moving full speed ahead on our next generation hardware, focused on delivering the biggest technological leap ever in a generation,” but the path to achieving that leap remains complex.
The current timeline points to a potential launch in 2027, but this is considered a “best-case scenario.” Microsoft is prioritizing a polished user experience and is carefully evaluating the readiness of both the hardware and software before committing to a firm release date. The integration of a full Windows environment, coupled with the potential for OEM-designed consoles, represents a bold and potentially transformative step for the Xbox platform.
