Fortune: Microsoft Internally Projects Project Helix Xbox at $1,200-$1,800

Microsoft has internally projected that its next-generation Project Helix Xbox console could cost consumers between $1,200 and $1,800 unless the company subsidizes the price, according to a new Fortune report. Microsoft has not announced a price.

Microsoft has long subsidized hardware costs. The company has traditionally covered more of the hardware expense than Nintendo or Sony, though living room gaming devices have never reached these price levels before. The report notes that the PS6 faces similar pricing pressures.

Affordability ranks as a top challenge. Xbox CEO Asha Sharma has identified affordability as a key obstacle for Project Helix, driven by the AI race consuming supplies of memory and storage. Microsoft is already struggling to keep existing Xbox Series X/S consoles in stock despite recent price increases.

Third-party sales revenue helps offset subsidies. Platform holders rely on commissions from third-party game sales to recoup hardware losses, with Sony generating hundreds of millions this way. Xbox's slower install base growth this generation reduces that revenue stream.

Former executive outlined past subsidy levels. Phil Spencer said in 2022 that Microsoft subsidized each console purchase by $100 to $200, expecting to recover the cost through accessories and storefront sales. Even continued subsidies may not fully offset the higher component costs projected for 2027 and 2028.