It has long been rumoured that the next-gen Xbox, expected to launch sometime in 2027, would be a gaming PC hybrid, bringing Steam, EGS, GOG, and other storefronts to the console for the first time.

According to a new Windows Central report published earlier today, the rumours are true — next-gen Xbox will function much like the Xbox Ally handheld: a TV-first interface sitting atop Windows 11, allowing you to exit out onto the desktop and use the console as you would a traditional PC.

One of the core concerns with this concept, especially in light of the Xbox Ally, is that next-gen hardware would not be backwards compatible with Xbox Series X/S, Xbox One, and Xbox 360 games. However, Windows Central claims that this new console, codename “Magnus”, will have the capability to run “all of your current Xbox games” on top of any PC titles that you already own, bringing both libraries together.

2027 Is The “Best Case Scenario” For Next-Gen Xbox

With that being said, rumours of a 2027 launch may be far-fetched. Microsoft reportedly “hasn’t fully, internally committed” to releasing it next year, and it all depends on how long it will take to iron out the kinks with Windows 11 following issues that cropped up with the Xbox Ally. Windows Central reports that Microsoft and Xbox are “collaborating harder than ever” to ensure the operating system is polished for a console-like experience to prevent similar hurdles. As such, 2027 is supposedly the “best case scenario.”

What’s especially interesting about this next-gen vision is how Xbox plans to break down traditional console barriers, working with OEMs like ASUS to build various third-party options for Xbox gamers, much like we already saw with the Ally last year. The first-party console will be the “quintessential” Xbox, but we could also see more expensive, premium alternatives by other manufacturers, as well as slimmed down, more affordable options.

To further this goal, Xbox reportedly hopes to promote cross-play multiplayer, saves, and purchasing, hence why it has already brought so many of its exclusives to Steam and PlayStation. Though with RAM growing exponentially more expensive thanks to US tariffs and manufacturers selling directly to AI data centers, Microsoft’s next-gen offering is expected to have a more premium price tag, though Windows Central claims that it won’t “suddenly become inaccessible.”

Microsoft is currently a BDS target, meaning there are many who are boycotting all Xbox products — including Xbox-published games — until it is removed from the list.