Microsoft knows it can’t beat Nintendo and PlayStation playing by traditional console rules anymore.
That’s why the next Xbox is shaping up to be the most radical hardware shift in the brand’s history, and third-party companies will be able to build their own versions of it.
AMD’s magnus chip opens the door to OEM partnerships
According to a recent report from Windows Central’s Jez Corden, the upcoming Xbox Magnus will mark Microsoft’s first gaming hardware as an Original Equipment Manufacturer (OEM).
Translation: Microsoft won’t be the only company making Xbox consoles anymore. The new strategy allows tech partners like ASUS, Lenovo, MSI, or others to manufacture their own customized Xbox hardware using AMD’s Magnus chip.
Think of it like GPU manufacturers, NVIDIA designs the chip, but ASUS, MSI, and Gigabyte each build their own cards with different cooling, speeds, and price points.
The same concept applies here. AMD’s custom System-on-Chip (SoC) for Xbox Magnus is specifically engineered to support this modular approach, giving manufacturers flexibility to target different markets and price ranges.
We’ve already seen this partnership model with the ASUS ROG Xbox Ally, and Microsoft is doubling down on it for the next generation.
The goal is straightforward: bring Xbox to players instead of forcing players to come to Xbox. By opening up the ecosystem and letting hardware partners into the mix, Microsoft can reach niche audiences and premium segments that a single console SKU never could.
A Windows PC disguised as a console
Xbox Magnus isn’t just a console, it’s a hybrid. Corden’s report reaffirms that the device will run Windows as its base operating system, with a traditional console-style interface layered on top for controllers and navigation.
This Windows foundation means Magnus can do everything a gaming PC does: run Steam, Epic Games Store, GOG, code development software, music production tools, streaming applications, and obviously, play games.
But here’s where it gets interesting. Despite being a PC at heart, Magnus will maintain full backward compatibility with all current Xbox titles. It’s essentially a gaming desktop that doubles as your next-gen Xbox, eliminating the need to choose between platforms.
As for the launch window, AMD CEO Dr. Lisa Su confirmed during the company’s Q4 2025 earnings call that “development of Microsoft’s next-gen Xbox featuring an AMD semi-custom SoC is progressing well to support a launch in 2027.” However, Corden’s sources suggest late 2027 is the “best-case scenario,” meaning delays are possible as Microsoft and AMD refine the experience.
The Magnus chip itself is a beast. Leaked specs point to a dual-chiplet design combining Zen 6 CPU cores with RDNA 5 GPU architecture, up to 68 compute units, 48GB of GDDR7 memory on a 192-bit bus, and advanced AI capabilities through a built-in NPU. If accurate, this hardware could outperform the rumored PlayStation 6 by 15-30 percent in raw specs.
Microsoft’s pivot toward an open, Windows-based Xbox ecosystem represents a massive gamble. If it works, the company could redefine what a console even means. If it doesn’t, well, at least they tried something different instead of just getting steamrolled by Sony and Nintendo again.
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