This is what Microsoft has always wanted in the first place. A PC for the living room.
Personally, I think this “could be” a smart move as long as Microsoft doesn’t mess it up… Sony will have the PS6 which will most likely launch at a set price point with set specs. The only SKUs will probably be limited to Disc vs Digital options and maybe SSD size. Rumors suggest it won’t launch until 2028 which means we won’t get a “Pro” version until 2031 if it comes at all.
With this new strategy, Microsoft could launch their entry into the next gen in 2026 giving them a nice head start and a power advantage over the PS5 Pro. Then they could continue to launch additional Xbox systems through their 3rd party partners. Now let’s assume Microsoft establishes a minimum spec standard and let’s also assume they continue to push Xbox towards a PC like experience which means customers will be able to tweak their game settings according to the system they have. This would mean Microsoft could continue to release different Xbox systems at various price points with various specs meaning there is no more wait for a mid-gen “Pro” like system. Gamers on a budget can buy the low spec model and get a Series S like experience with games running at a lower resolution and frame rate. Gamers who want the best of the best can get a high spec Xbox and tweak their settings to play at the highest resolution with the highest quality. In theory in could certainly work and it’s been the norm in the PC space for a while now. Some gamers experienced CP2077 in 720p in low graphics mode at 30fps on their potato PC while others experienced it in 4K with Path tracing at 100fps.
By the time the PS6 launches in 2028 potential customers can either choose between the one PS6 console with set specs at a set price or they can choose from various Xbox systems according to their power and budget needs. For Microsoft it would be the equivalent of surrounding your enemy on all sides. It’s a great plan… but again that’s if Microsoft doesn’t mess it up…
…which judging by their decisions this generation, they probably will mess it up…
You are looking at this the wrong way. For one you still have the mindset of someone who thinks Microsoft is trying to outcompete Sony with this hardware model change. They aren't. That is not their aim anymore and given their multiplatform aims it would be counterproductive for them to pursue that goal.
Because the way it seems to me is you think they would be repeating the Series S/X strategy all over again just with even more hardware SKUs and no exclusives whatsoever. If the Series S & X approach didn't work, why would this approach of yours somehow succeed in the context of "beating Sony"?
Now, would it be successful in terms of addressing needs in the PC market and serving as a nice bridge for some of the Xbox console faithful? Likely. But I see that as being its own thing at this point. The only way this actually does begin to affect Sony in a negative way is if Sony themselves continue porting all their games to PC (or especially if they decide to push Day 1 PC for both GAAS and non-GAAS titles). Reason being because that eats away at the value proposition of their console among a segment of hardcore & core enthusiasts meaning slower early adoption rates, meaning less overall adoption of hardware and much less in software revenue & profits.
Also you're ignoring the rumors of Sony having a portable coming to the market, or a PS6-based handheld that could potentially serve as a lower-priced entry point to the PS6 hardware ecosystem. There is definitely something portable-wise coming from SIE in the next 2-4 years to complement their home consoles (IMO it should be a PS6-based portable and maybe a 'PS6 S' that's the same specs of the PS6-based portable but a home console model), to serve as cheaper points of access to PlayStation ecosystem but not compromising the value proposition long-term with incessant PC ports.
I'm very interested to see this endeavor. I don't really know if it'll be a success, considering a version of this was tried in yesteryear with the 3DO.
That said, Microsoft has a lot more resources and a very different era to try this approach, but they'll have to get over the biggest obstacles of all and that's perception.
To me, the instant their flagship titles begin showing up on PlayStation or Switch, the perception is Xbox is dead and that's the reality of it.
The real obstacle will be how can you convince people to go for your, what looks like a pre-built PC over the previous two?
Unless the notion is PlayStation and Nintendo are no longer competitors, but just means to a more profitable end.
If Steam is integrated, that makes a difference with Game Pass also, but it's still a PC. How many differently powered versions will there be?
All good questions. I'm pretty curious myself.
The wording here in the OP makes it sound like Microsoft aren't even going to make the hardware next go-around; just the reference spec that OEMs license out. And if they are going to using a version of Windows on top of that, then getting "Xbox" as part of the licensing is just going to be for branding purposes.
Something still tells me that is not going to be what Microsoft actually does, though. I need more time to think it out, but there is an alternative approach they could do. Basically, something closer to what they're already doing, but get apps for Steam, EGS etc. on Xbox OS, make some 'Xbox OS Extended Mode" for natively running Steam games on Xbox (little to no recompiling needed), bring Windows Store to Xbox, allow Xbox systems to run whitelisted Windows applications via Xbox OS Extended Mode (also maybe partially sandboxed from some parts of Xbox OS) without needing a Developer Mode, and tie Steam, EGS & other gaming storefront/launcher access to Game Pass subscription tiers (hey they did this with Netflix back on the 360 and many didn't mind).
That approach would have a lot of work involved too, but seems more feasible to me than making a full-blown Xbox gaming UI front for Windows 11 or 12, at least by the time it seems MS want to launch another generation. It'd probably take until next decade for MS to really bring that type of UI option and expected security/stability to a modern Windows OS, but they need a new gen for Xbox before that time. The approach I'm suggesting here would also probably allow them to keep hardware more affordable; you'd still pay more than the traditional console equivalent for similar performance, just not astronomically more (like what a fully 3DO-style model would entail). So assuming similar launch timing to a PS6, your next Xbox that's roughly PS6-equivalent in performance might cost $549, or $599 instead of say the $799 it maybe would've costed otherwise.
MS knows they'd lose a lot of sales on Xbox Store with people optioning for say Steam instead, but with this approach they'd still make money from that access of Steam on Xboxes via Game Pass, without needing to work out some complicated rev share model with Valve. And I guess with this model, you could still get a variety of other devices via licensing to OEMs; the OEMs can price their devices as they would like, I'm sure some would charge more of a premium to have larger profit margins considering they wouldn't get the Game Pass benefit Microsoft would get (since they don't own that service). But I also think OEMs could have more freedom with custom device form factors; MS might just stick with a console-like box and maybe a portable handheld, but some OEMs might go for tablet or laptop takes.
And you could still have the modular upgradability component here too. I think form factor type would influence what types of upgrades could be had however. Like with say a Microsoft Xbox console-like box, you can't just drop a 5080 in there; it'd be too big and use too much power. They could maybe partner with GPU makers to develop custom low-profile GPU cards that can slot into the system though (NEC had this idea for the PC-FX but the only GPU card module they released was a development 3D card for PC); meanwhile maybe an OEM has their own Xbox that's physically larger and allows for that 5080 to be installed, who knows.
I think this approach is at least just as interesting to consider as them simply adding an Xbox Big Picture Mode to Windows and having a "reference spec" that OEMs build to, and I do think that one would eventually be Microsoft's end-game. But some of the work they'd need to do in order to make Windows secure, stable and intuitive enough for a console-like UI experience would be a great undertaking. Just adding 100% working emulation for OG Xbox & 360 (even XBO, though lesser so) to Windows so that console owners can take their libraries for those systems to PC could be laborious, though again, I'm sure MS are working towards that happening.
Question is really, will that be ready by the time they need new hardware? And will they need new hardware sooner (i.e those 2026 rumors) or later (i.e launching closer to a PS6)? Either way I don't see either option changing their software strategy; they are going to be more or less fully multiplatform going forward. But this hardware component to that on their end has some intrigue in what way it could be done, and when.