Next gen Xbox console has been cancelled claim insiders but Microsoft denies it

As enthusiasm around Xbox sinks to an all-time low, Microsoft has denied rumours its next gen console has been cancelled.

While it’s seemed like Xbox has been on a downwards trajectory for some time now, doubts around the console’s future have accelerated over recent weeks.

The recent 50% price increase to Xbox Game Pass Ultimate felt like a tipping point in the arena of public perception, but prior to that we’ve seen Xbox Series X/S consoles being pulled from shelves, studio closures, and a multi-platform marketing shift.

All these factors, coupled with Nintendo and Sony’s dominance in the space, have brought Microsoft’s future as a console manufacturer into question. Now, there’s been a flurry of rumours that the company’s next gen console plans are in peril.

The rumour started with NeoGAF’s SneakersSO, a known Xbox insider, who claimed plans for the next gen Xbox had gone from ‘being definitive, to up in the air’. They went on to claim the ‘future of Xbox is software publishing’, with a particular focus on IPs like Call Of Duty, World Of Warcraft, Minecraft, Candy Crush, and Forza Horizon.

They added: ‘It was one of those situations where, despite folks being told ‘Hey, we wanna pull the trigger on this in 2026′, the steps you would need to take in the lead up to delivering a new console gen weren’t being met.’

As the rumour began to circulate, Microsoft released a statement to WindowsCentral, stating it is still committed to its next gen hardware plans – at least, for now.

‘We are actively investing in our future first party consoles and devices designed, engineered and built by Xbox,’ the statement from Microsoft reads. ‘For more details, the community can revisit our agreement announcement with AMD.’

Microsoft announced the AMD partnership in June this year, where it confirmed plans to create a ‘portfolio of devices’, including ‘the next generation Xbox consoles in your living room and in your hands’. However, there have been rumours of shifting hardware plans behind the scenes.

According to sources earlier this year, Xbox ‘essentially cancelled’ plans for a next gen portable device, as it steers towards PC gaming with devices like the ROG Xbox Ally, which set to launch later this month.

Just recently, notable insider KeplerL2 claimed this first party handheld was canned because ‘AMD wanted a commitment’ of over 10 million units to justify making a dedicated system on a chip (SoC). However, with sales of other PC handhelds like the Steam Deck and Lenovo Legion being less than five million, Microsoft ‘didn’t want to take the risk’.

Microsoft has made several statements about creating a handheld system, with Xbox boss Phil Spencer previously saying it was building prototypes in 2024, but it was always unclear if these plans were related to a first party or third party device.

While Microsoft has given vague details around its next gen plans, with bold promises of the ‘largest technological leap’, it has never specified what form they’ll take. Many have assumed it’ll involve another traditional console like the Xbox Series X/S, but rumours have suggested it could be a PC in a ‘TV friendly shell’, akin to Valve’s Steam Machines.

The latter makes more sense considering Microsoft’s marketing has pivoted away from the traditonal home console to Xbox Game Pass, but even then, the potential success of another Xbox console, in any form, feels shaky at best. Not to mention the Steam Machines themselves were a commercial failure.

It doesn’t help that Xbox, as a brand, is seemingly fading out from stores around the world. The UK and US retailer Costco is no longer selling Xbox consoles, while several retailers in Spain have apparently decided to drop it too, according to Spanish insider extas1s.

Microsoft can change its story very quickly, as has been made clear in the way it’s described its multiformat plans over the last few years, so it’s difficult to gauge whether this new statement is something they’ll stick to.

However, with rumours its next gen console is on track to launch 2027 or earlier, and before the PlayStation 6, the company doesn’t have much time to make a decision on its future hardware.

Whether a new console arrives or not, 2026 is set to be a big year as it marks Xbox’s 25th anniversary, with a new Halo, Gears Of War, and Forza Horizon all set to be released next year.

Email gamecentral@metro.co.uk, leave a comment below, follow us on Twitter.

To submit Inbox letters and Reader’s Features more easily, without the need to send an email, just use our Submit Stuff page here.

For more stories like this, check our Gaming page.