Microsoft and AMD Partner for Next-Gen Xbox Consoles: A Game-Changing Collaboration for Gaming
In a joint announcement on Tuesday, Microsoft (MSFT) and AMD (AMD) revealed their partnership to develop custom chips for the next generation of Xbox systems, ranging from in-home to handheld consoles. The arrangement will allow game developers to unlock a deeper level of visual quality and immersive gameplay, enhanced with the power of AI, while maintaining compatibility with users' existing Xbox game library, said Xbox president Sarah Bond in a statement.
Last week, the company debuted a new line of handheld consoles called the Xbox Ally and Xbox Ally X in partnership with device manufacturer ASUS. These systems, available later this fall, will allow users to access their Xbox library on the go while offering the ability to stream games via the cloud.
The move is part of Microsoft's broader strategy to expand its Xbox portfolio beyond its traditional home console and build out its Game Pass subscription and cloud gaming service. The company has already acquired some of the biggest gaming developers and publishers in the industry, such as ZeniMax for $7.5 billion in 2021. It has also released a number of its games on rival platforms, including Sony's PlayStation.
Microsoft's Game Pass, which costs between $9.99 and $19.99 depending on features, is the company's gaming storefront and online gaming service. To further entice users, the company says it is working to bring third-party stores to its devices, starting with its Ally handhelds.
AMD has worked with both Microsoft and Sony on the chips for their current generation of consoles, while rival Nvidia teamed with Nintendo for both its Switch and Switch 2 handhelds. Microsoft's gaming business falls under the company's More Personal Computing segment, which brought in $13.37 billion in revenue during Q3, with Xbox gaming and content services growing 8% year over year.
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