When Microsoft announced the launch date of its first Asus-powered handhelds without announcing prices, I had hoped it was a sign the leaked prices were too high. I had hoped Microsoft would subsidize them the same way it subsidized the Xbox itself. Maybe it would send a shockwave through the handheld market like the Steam Deck’s console-like $399 price did in 2021!
I was too optimistic. Instead, Microsoft’s flagship handheld “Xbox” is a $1,000 portable — or $599 if you opt for a far weaker model.
On Thursday, Microsoft and Asus opened preorders for the ROG Xbox Ally X and ROG Xbox Ally at $999 and $599, respectively, or €599 and €899 in Europe, £499 and £799 in the UK, and $799 AUD and $1599 AUD in Australia.
One way to think about this is that they’re priced like PCs instead of consoles, which makes sense because they literally are Windows PCs! Here, “Xbox” is only a layer of games, services, and a new full screen experience on top of a Windows machine.
But though “priced like a PC, not an Xbox” might make sense today, it may not make sense tomorrow. This could be the new normal for Xbox, and possibly for consoles period.
Everything we know about video game consoles is being flipped on its head. It used to be each console got cheaper and cheaper — but not anymore. As my colleague Andrew Webster put it last week:
Established wisdom used to be that buying a game console at launch was a bad idea. It was the worst-possible version of the experience: launch consoles cost more and had fewer games, and often these consoles got not only cheaper but better over time, through revisions that made them smaller or added features. For the current generation, though, those who bought at launch look like geniuses — video game consoles just keep getting more expensive.
Microsoft and Sony also often used to subsidize their game consoles, selling them at a loss and making their money back on games and services; Microsoft’s Lori Wright admitted in 2021 that’s how the Xbox worked. But it isn’t necessarily working that way anymore. This year, an Xbox Series X costs $150 more than it did last year — likely because of tariffs — Microsoft has sold fewer Xboxes in recent generations despite the subsidies, and the Xbox Game Pass subscription apparently isn’t doing the numbers that Microsoft hoped for.
So Xbox is no longer about the box; to maximize game sales, Microsoft’s biggest franchises are no longer exclusive to the Xbox or even the PC. They now appear on rival PlayStation, as well, where they sometimes even top the charts! They appear in the cloud, where Microsoft is trying to bring them to your phone, too, if or when Apple and Google make it easier.
It’s quite possible that the next Xbox will literally be a series of PCs, rather than a traditional console. It’s been its trajectory for over a decade, ever since the Xbox effectively became a Windows-running x86 AMD PC.
None of this means the box goes away, but it may become more of a luxury than ever. Luxuries cost. And now, Microsoft may be testing the waters to see just how much its Xbox fanbase is willing to pay for a future console.
In some ways, people can afford less than ever these days, as the prices of food and other basic necessities go up, thanks at least partially to President Donald Trump’s deeply confusing trade war.
But we also live in an era of nostalgia and escapism, in which people want opportunities to retreat from the chaos, tune it out, and try to return to a simpler and happier time. That means riches in niches for companies selling pricey toys. You can now buy a $1,000 Lego Death Star, the most expensive Lego set ever, because when Lego tested the waters with pricier and pricier sets, it failed to find a limit to how much its deeper-pocketed fans would spend. You can buy a $1,500 walking, talking, and transforming Transformers Megatron, too.
Historically, gamer outrage has kept console and game prices low. Even as inflation and game development costs continued to rise, no game company wanted to be the one to rock the boat. Many remember the moment when Sony revealed the 60GB PS3 would cost “$599 US dollars” and console makers have been shy of crossing that threshold.
But shortages and tariffs have given the industry an opportunity to blame higher prices on external factors, and they’re not likely to go down again now that they’re going up. Nintendo now sells $80 games, and while gamer outrage has momentarily kept Microsoft from doing the same, that may not last long.
Just how much might the next Xbox cost, or the next PlayStation, now that the barriers have cracked? It might partly depend on how well the Xbox Ally sells. But I somewhat doubt that “the largest technical leap you will have ever seen in a hardware generation” will wind up being easily affordable.
Last year, Xbox boss Phil Spencer told Bloomberg, “We’re not going to grow the market with $1,000 consoles,” and I think that rings true. But selling consoles at all may not be about growing the market. Perhaps Microsoft will grow the Xbox market by putting games everywhere it can, while collecting a licensing fee from partners who’ll build niche hardware for its most devout fans.
