Xbox CEO Asha Sharma said mass audiences can no longer afford to spend thousands of dollars [1] on a new console generation.
This shift in affordability threatens the traditional hardware cycle of the gaming industry. If high-end consoles become prohibitively expensive, Microsoft may be forced to pivot away from the standard retail model to maintain its user base.
Sharma said the industry has reached a critical point regarding hardware costs. She said it is hard to imagine mass audiences being able to afford "thousands of dollars" [1] for the next generation of gaming hardware.
According to Sharma, the rising costs are driven by global crises and the increasing influence of AI on component production [2]. These factors have pushed the price of necessary hardware and components to levels that exceed the budget of the average consumer.
Because of these economic pressures, Sharma said Microsoft must look at new business models [2]. The company is now exploring alternatives to the traditional one-time purchase of a console to ensure that gaming remains accessible to a wide audience.
Sharma said that a mass audience cannot afford "thousands of dollars" [2] for a next-gen console. This financial barrier necessitates a strategic shift in how the company delivers its technology and services to the public.
“"We have reached a point where it will be hard to imagine mass audiences still being able to afford 'thousands of dollars' for a new console generation."”
The admission from Xbox leadership suggests a potential move toward cloud gaming or subscription-based hardware access. If the cost of local silicon and AI-integrated hardware continues to climb, the industry may transition from selling high-cost physical machines to providing hardware as a service, reducing the entry barrier for consumers.
