The next-gen Xbox won’t cost you $1,800. It can’t. Can it?

What happened

Fortune published a report, based on Microsoft insiders, saying the next Xbox could cost between $1,200 and $1,800 when it arrives in 2028. The article's author thinks that price is very unlikely. He points out that Microsoft leaders have said many times that people cannot afford very expensive consoles. He also says Fortune's sources may be right, but the price could still be made lower in other ways.

Key numbers and facts

• Projected price: $1,200 to $1,800 when the next Xbox arrives in 2028
• Microsoft may have spent $1.5 billion to sell the Xbox Series X and S at $499 and $299
• Microsoft spent about $20 billion on content, platform, and hardware subsidies over the past five years
• The $1,000 Xbox Ally X handheld is a gaming PC that Microsoft sells

Why the price is so hard to guess

A console company often sells the box for less than it costs to make. It then earns money from games and subscriptions like Xbox Game Pass. This is called a subsidy. Right now, RAM and storage memory are very expensive, which makes the box cost more to build. Microsoft's new Xbox boss, Asha Sharma, has said the company must stop these subsidies and use "radically different business models."

Why it matters

A console that costs well over $1,000 may be too expensive for most families. If Microsoft wants the next Xbox to sell well, the price has to be something ordinary people can pay. The article says the answer may come from a different plan, such as a subscription or a payment plan, rather than one high price paid all at once.

What to watch

• Whether Microsoft confirms the official price of the next Xbox
• Whether Microsoft keeps selling the console at a loss, which is called a subsidy
• Whether a subscription or payment plan becomes the main way to pay
• How RAM and storage prices change before the 2028 launch