Xbox CEO: New Business Models Needed to Cut Console Costs

In a recent interview, Xbox chief Asha Sharma said rising component prices and global shortages are forcing the company to explore “radically different business models” to keep consoles affordable for mass audiences. She described the situation as a crisis for the hardware industry and said Xbox must rethink how it builds and distributes devices.

Sharma urged a re-examination of what she called the “cost construction” of consoles, saying Xbox is considering new plans and partnerships to expand distribution and reach. She also noted the company is looking at experiences outside the physical console to attract new players.

“We are in a crisis right now, the entire industry is…,” Sharma said, adding that the company must find “other ways to think about the cost construction of the console.” She called for creating different plans so more people can participate in console gaming and for pursuing partnerships that broaden availability.

Sharma predicted new business models will arrive soon. She argued it will be difficult to expect mass audiences to spend thousands of dollars on a single console generation and said she expects “radically different business models that we never expected” to begin appearing later this year.

She discussed Project Helix as an example of a high-end approach, describing it as a premium, high-performance system that supports playing PC games, offers backwards compatibility and aims to deliver “leading performance.” Sharma said she is excited for the device while indicating the company will also pursue other ways to reach customers beyond a single top-tier console.

Some industry observers interpret her remarks as a possible signal that Xbox could offer lower-cost hardware alongside premium models, though no successor to existing lower-priced consoles has been announced. Sharma emphasized the need to avoid forcing large numbers of consumers into spending very large sums on one generation.

Sharma framed the options as practical responses to current market conditions: change how consoles are costed, form distribution partnerships and broaden the range of experiences Xbox offers. She set a near-term expectation for change by saying new models could begin to appear later this year while confirming Project Helix will remain a high-end option.