Gaming consoles are a bit at a cross roads. Gaming developers have a headache of several platforms
- Series X/S
- PS5
- Nintendo Switch
- PC X64
- iOS/Android
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In 5-10 years life will be easier when all of the above might be Arm based. In the meantime gaming studios are reducing head count and cancelling titles because they are very cost concious. The Xbox handheld can take the following routes:
Windows X64 based with xbox UI:
Pros: A handheld windows PC which means that almost any game that runs on a windows PC should run on the device with minimal optimisation required for gaming studios.
Cons: Poor battery, high heat, bulky size and the device will likely be super outdated 1-2 years post launch when ARM based hardware has been rolled out.
ARM based with xbox UI:
Pros: Energy efficient, optimised size/weight and future proof.
Cons: Emulation will not work for all titles and the risk of bugs is high. In the short term, gaming studios will unlikely want to spend million to optimise for ARM x64 if there are less than 5m devices in circulation.
I don't think the Xbox handheld will be THE handheld that everyone will buy. It will be a reference hardware by MS that MSI, Asus, Acer and Gigabyte will follow and create their own versions whether it's x64 or ARM based. This way Xbox is an eco-system. Microsoft provides the optimised OS, schemas for buttons/joystick, content(games) while OEM provide the hardware.
Phil is no longer pulling the strings. Satya has stepped in so I wouldn't rule out anything. If the next Gears of War will be a live service game, network effects are critical. The more people who can play the game, the more views on YouTube, the more people want to buy and play it.