Xbox hints at 'radically different business models' ahead of Project Helix release

A cheaper Xbox console?

(Credit: Microsoft)

• 🤔 New Xbox CEO Asha Sharma has teased “radically different business models” may be needed for Xbox to overcome the horrible current market conditions

• 💰 People think this could mean more affordable consoles, or a different approach to getting Xbox hardware into people’s hands

• 🎮 It could see the revival of Project Keystone, Microsoft’s affordable Xbox game streaming stick

• 😬 Sharma had previously said Project Helix, Microsoft’s upcoming hybrid console, would be affected by the current memory crisis

New Xbox CEO Asha Sharma has hinted that Xbox may need “radically different business models” to navigate the brutal market conditions Microsoft’s gaming division is facing.

People are already speculating about what that could mean, whether that’s more affordable hardware to entirely new ways of getting Xbox devices into players’ hands. Some even think it could lead to a revival of Project Keystone, Microsoft’s long-shelved Xbox game-streaming stick.

Sharma’s comments follow her recent interview with Fortune, where she suggested that Xbox may need to rethink the traditional console model to stay competitive. She also noted that Project Helix, Microsoft’s upcoming next-gen hybrid console, has been affected by the ongoing memory crisis impacting the industry.

Sharma said the Xbox hardware division is “in a crisis”, due to the exponential rise in component and manufacturing costs compared to previous generations. Typically, console costs fall over time, and Sharma noted that at this point in the lifecycle, hardware is usually “about 50% usually expect to see consoles come down in price over their life cycle – by her admissions, costs are usually “about 50 percent of the [launch] cost”. Instead, Xbox hardware costs are currently “2.75x” higher.

That reality has pushed Microsoft to explore new approaches to reduce the impact on consumers, including ways to optimize the cost of building the console itself.

More interestingly, Sharma said Microsoft has been developing “different plans” to let more people “participate in the console”. That’s as far as she went, though looking to the past, Microsoft has tried different approaches in the past.

The Xbox All Access program allowed users in select regions to rent-to-own an Xbox Series X or S by paying a monthly fee for two years with no upfront cost, and it came bundled with an Xbox Game Pass subscription.

Xbox All Access was killed in mid-2024, but it may be a more ‘affordable’ means of getting Xbox consoles into the hands of users today.

Sharma’s reference to “radically different business models” that Microsoft “never expected” seems to hint at more affordable consoles. One possibility could be a lower-power console that offloads some processing to the cloud.

Microsoft had a similar idea for a streaming-based console or stick with Project Keystone, which was mothballed back in October 2022.

The plan was to have a small, almost Amazon Fire Stick-like device that could access Microsoft’s Xbox Cloud Gaming service with a Game Pass subscription to provide access to AAA games without an expensive console.

Whether Project Keystone or another derivative may see the light of day is anyone’s guess, but it’s refreshing to see Microsoft potentially cater to the more affordable end of the market, especially when prices are only going up.

Sharma had previously noted that the price of Project Helix, the next-gen Xbox, would be impacted by the memory crisis.

And it isn’t just Microsoft that has been affected by the current horrible market conditions, either. Sony cited “continued pressures in the global economic landscape” for its recent hefty PS5 price rise. Likewise, even Nintendo has decided to raise Switch 2 prices by $50 in September.

Up next: Xbox Series X25 Limited Edition pre-orders will be protected from scalpers, as Microsoft says ‘it’s top of mind’

Reece Bithrey is a journalist with bylines for Trusted Reviews, Digital Foundry, PC Gamer, TechRadar and more. He also has his own blog, UNTITLED, and graduated from the University of Leeds with a degree in International History and Politics in 2023.