Xbox is placing a strong emphasis on delivering a next‑generation console that balances efficiency, affordability, and raw performance, a strategy shaped by the escalating cost of hardware components and the rapid evolution of artificial intelligence technologies. In a recent interview with the BBC, Xbox’s senior leader Asha Sharma highlighted the industry‑wide need to innovate around price and power consumption, noting that this is a challenge the company has not previously faced at this scale. "All of the industry needs to start to innovate on affordability and efficiency," Sharma said.
"That is something that we have not had to do [previously]." She went on to explain that the current supply‑chain crisis, which has driven up the price of semiconductors, memory modules, and other essential parts, forces console makers to rethink how they design and price their hardware. "With the crisis that's currently happening in hardware and components, it is absolutely something all of us need to be thinking about and innovating on and giving people more choice in terms of how they play their console and how they purchase their console," she added. While Sharma declined to confirm whether the upcoming Xbox, internally referred to as Project Helix, will retain an optical disc drive, she did discuss a new "disc‑to‑digital" feature that will allow owners of physical games to unlock a digital copy of the same title.
"I know players love physical media, and I know there's a lot of benefits in digital media, and I want to make sure people have a choice," she explained. "We've long pioneered backwards compatibility, and so you'll continue to see that as we go forward in the generations." The conversation then shifted to the role of artificial intelligence in the console’s development. Sharma, who previously headed CoreAI at Microsoft, described AI as a technology that is "fundamentally changing a lot of things." She stressed that Xbox’s approach will be guided by real‑world conditions and the desire to deliver the best possible gaming experience. "The platform will take into consideration what's happening in the world and build the best experience for our players," she said, adding that for Project Helix this means scrutinising hardware efficiency in terms of storage utilization, memory bandwidth, unit cost, and the selection of components.
Sharma also reiterated Xbox’s stance on the quality of AI-generated content. She warned against a rush for short‑term gains that could flood the ecosystem with low‑quality, "soulless AI slop." "Games are and always will be art, crafted by humans, and created with the most innovative technology provided by us," she asserted. This philosophy was echoed by Xbox chief content officer Matt Booty, who confirmed that the studio is under no pressure from Microsoft to adopt AI indiscriminately. "Our teams are free to use any technologies that might be beneficial, whether it's helping write code or check for bugs – things more in the production pipeline," Booty said.
"At the end of the day, as Asha said, we're committed to art made by people. Technology is only in support of that." In addition to product strategy, Sharma touched on the broader organizational changes taking place at Xbox. The company recently underwent a significant restructuring that resulted in the layoff of roughly 3,200 employees—about 20 percent of the Xbox workforce—and the divestiture of five internal studios.
Sharma framed these moves as necessary steps to secure the long‑term health of the division. "The restructuring was implemented to ensure we are here for the next 25 years and we're continuing to serve our purpose," she explained. She added that the gaming landscape is evolving, with players demanding new ways to engage and new technological experiences, and that Xbox must adapt accordingly. "We're in the middle of a new generation that wants to play in a different way, and new technology as well.
Within Xbox, we haven't been healthy." Overall, the message from Xbox leadership is clear: the next console will be built with a keen eye on cost efficiency, component selection, and the responsible integration of AI, all while preserving the artistic integrity of games. By offering features like disc‑to‑digital conversion and maintaining a commitment to backward compatibility, Xbox aims to give gamers flexibility in how they own and play their titles. At the same time, the company is positioning itself to navigate a volatile hardware market and to leverage AI as a supportive tool rather than a replacement for human creativity.
This balanced approach seeks to keep Xbox competitive, sustainable, and true to its core mission of delivering memorable, player‑focused experiences for years to come.