Microsoft announces ‘return of Xbox’ with console that plays Xbox, PC games

This story was originally posted on MyNorthwest.com

In a surprise announcement, Microsoft’s newly appointed Gaming CEO Asha Sharma confirmed the “return of Xbox” with its fifth-generation console, which is compatible with both Xbox and personal computer (PC) games.

The announcement of Project Helix, the code name for the new console, follows recent skepticism from an Xbox co-creator who believed the Xbox consoles were being “sunsetted” as Seattle-based Microsoft prioritized its investments in artificial intelligence (AI).

Rumors had been circulating for quite some time about Xbox’s next-generation console giving players the ability to switch over to PC games, which Sharma confirmed on Thursday in a major announcement.

“Great start to the morning with Team Xbox, where we talked about our commitment to the return of Xbox, including Project Helix, the code name for our next generation console,” Sharma said in the statement. “Project Helix will lead in performance and play your Xbox and PC games.”

Announcement counters co-creator’s claim that Microsoft was phasing out Xbox

In an interview, Xbox co-creator Seamus Blackley claimed the gaming console is no longer a priority for Microsoft, according to KTLA 5.

“[Microsoft CEO] Satya Nadella has made an incredible number of bets and invested an incredible amount of money and credibility in the transform model AI future,” Blackley said. “Xbox, like a lot of businesses that aren’t the core AI business, is being sunsetted. They don’t say that, but that’s what’s happening.”

Blackley forecasted that Xbox’s days may be numbered under the new CEO of Microsoft’s gaming department.

“I expect that the new CEO [of Microsoft Gaming], Asha Sharma’s job is going to be as a palliative care doctor who slides Xbox gently into the night,” he said.

Sharma’s announcement appeared to counter Blackley’s prediction, unveiling a new console with significant advancements after years of declining hardware revenue.

Xbox, as of late, has been struggling to sell its hardware, with year-over-year declines of 29% in quarter one (Q1) of 2026, according to IGN. In Q4 of 2025, hardware sales were down 22% as well. From Q2 2024 through Q3 2025, Xbox’s hardware revenue was down at least 29% in each quarter, with a whopping 42% revenue decline in Q4 of 2024.

Microsoft initially released its highly coveted Xbox in 2001, after Sony’s PlayStation already held a majority share of the gaming console market, competing with the likes of Nintendo’s Nintendo 64 and Sega’s Saturn.

Since its inception, the Xbox has seen three additional generations, with the Xbox 360 releasing in 2005, the Xbox One in 2013, and the Xbox Series S and Series X releasing in 2020.

Although no release date has been revealed for Xbox’s fifth-generation console, it was confirmed that its production is in the works and will feature significant upgrades over former models.

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