Microsoft is reportedly taking its time in selecting a partner to produce the next-generation Xbox console, with AMD—the current chip supplier—facing competition from an eager Intel. Historically, Microsoft has shopped around to secure better deals before finalizing a contract, and recent events suggest a continuation of this approach.
Sources indicate Microsoft’s reluctance to immediately engage with AMD for their upcoming console, even after cancelling the Xbox Elite project. The company is expected to continue with refreshes of the current generation rather than moving forward with a brand-new offering. In contrast, Sony has already made headway by securing contracts for the PlayStation 6 and a next-gen handheld device, tentatively referred to as “Vita 2.”
There’s speculation that Microsoft’s delay in engaging AMD may be a negotiating tactic to drive down the price, with Microsoft considering other chip manufacturers in the interim, including Nvidia. The prolonged silence towards AMD seems to have particularly caught the attention of Intel, which views this as a potential opportunity to snag a valuable contract for its foundry business.
Two main factors fuel Intel’s interest: the prospect of rescuing the Arc discrete GPU (dGPU) segment from an uncertain future and the push to establish a stronger foothold in the competitive foundry industry. Intel’s CEO, Pat Gelsinger, reportedly regards a console contract with Microsoft as a vital lifeline for the dGPU business, which may otherwise shift its focus solely toward integrated GPUs (iGPUs). Additionally, Intel is eager to challenge TSMC’s dominance and is prepared to offer Microsoft unlimited production capacity, more competitive pricing, and a commitment to meet launch schedules.
Despite these motivations, Intel’s chance of securing the next-gen console contract may be slim. Recent reports indicate that Microsoft and AMD have resumed discussions, and the design phase for the next console could be underway, suggesting that AMD remains the front-runner. Nonetheless, the late start in the design process points to possible delays, potentially giving Sony a lead in launching the next console generation.
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The gaming industry is keenly watching these developments, as the partnership for the next-generation Xbox console could significantly impact the market and the competitive landscape among tech giants.
