Microsoft has revealed a collaboration with AMD to drive the next generation of Xbox, encompassing its future first-party Xbox consoles.

“We’re excited to announce that we’re developing the next generation of Xbox first-party devices and cloud, including our future Xbox consoles, in partnership with AMD,” Microsoft stated in an online release.

While Microsoft kept specific plans under wraps, it promised “unparalleled performance, stunning visuals, innovative gameplay, and seamless compatibility.” The company also confirmed that all upcoming projects will be “fully compatible” with players’ existing Xbox game libraries.

“We’ve forged a long-term strategic partnership with AMD to co-develop silicon for a range of devices, including our next-generation Xbox consoles,” Microsoft noted.

“Together, we’re delivering richer visuals, engaging gameplay, and AI-enhanced experiences—built on a platform crafted for gamers, not limited to a single store or device, and fully compatible with your current Xbox game library.”

In a video, Xbox president Sarah Bond shared that Microsoft is investing in “our next-generation hardware lineup, spanning consoles, handhelds, PCs, cloud, and accessories.”

The announcement confirms Microsoft’s plans for a new home Xbox console and an Xbox handheld. No release date was specified, but Bond teased, “We’re thrilled to share what’s coming next.”

Reports earlier this year suggested Microsoft is aiming for a 2027 launch for both its next-gen Xbox and Xbox handheld. Sources indicated the next-gen Xbox would resemble a PC more than any previous Xbox, supporting third-party storefronts like Steam, the Epic Games Store, and GOG.

Bond’s comments in today’s video reinforce this vision. “We’re focused on creating a gaming platform that’s always with you, letting you play the games you love across devices, delivering an Xbox experience not tied to a single store or device,” Bond explained.

“That’s why we’re collaborating closely with the Windows team to make Windows the premier platform for gaming.”

In the near term, Microsoft is working with third parties on Xbox-branded hardware, such as the Xbox Ally, a handheld gaming PC running a version of Windows 11 optimized for handheld use. It’s slated for release later this year.