Microsoft's next-generation Xbox console is reportedly taking an unconventional route by running on a customized version Windows 11 OS instead of the specialized console OS that typically powers these devices. According to Windows Central, the system will function essentially as a gaming PC that boots into an Xbox interface by default. This UI is likely similar to what the current Xbox Full Screen Experience looks and feels like, and will likely provide the same performance boost. We have already seen that Xbox FSE mode brings about a 9.3% reduction in RAM usage and about an 8.6% higher FPS due to the smaller system overhead. Users could exit that interface to access the full Windows 11 operating system, meaning the hardware would support Steam, EPIC, and other competing game stores, as well as standard PC applications alongside Xbox games.

This is Microsoft's first radical departure from the walled-garden approach that has defined console gaming for decades. What it could translate to is the first hybrid system that serves multiple purposes, from traditional gaming to running productivity suites of Microsoft 365 apps like Word, Excel, and others, all from the same system. Teams from the Windows and Xbox divisions are reportedly collaborating closely to adapt the operating system for living room use. Microsoft is also working with hardware partners like ASUS to create multiple devices at different price points rather than releasing a single standard console. Plans for a first-party handheld device are still under consideration, though the traditional console appears to be the main focus.