The next-gen Xbox will support Steam, Epic, and more while running on AMD chips

Next-gen Xbox consoles will integrate Steam, Epic support and use custom AMD chips.

: Microsoft's upcoming Xbox console lineup will integrate support for various digital storefronts like Steam and Epic Games Store, while maintaining backward compatibility for older game libraries. Xbox president Sarah Bond confirmed a close partnership with AMD to co-develop processors featuring next-gen graphics and AI capabilities, tailored for both home and portable devices. This partnership signals a departure from using standard AMD chips, moving towards custom silicon designed to power a possible Microsoft handheld system. The strategy aligns with Microsoft's hardware-agnostic model, competing against innovations like Valve's Steam Deck and portable PCs developed by Asus.

Microsoft has officially confirmed that its next-generation Xbox consoles will feature custom-designed AMD chips, continuing a long-standing partnership into a multi-year collaboration. Xbox President Sarah Bond revealed that the companies will co-engineer silicon for a "portfolio of devices" that includes both home consoles and handheld systems, as well as Xbox Cloud Gaming platforms. This new hardware will offer advanced graphics capabilities, immersive gameplay experiences, and AI‑enhanced features while maintaining full backward compatibility with the existing Xbox game library.

A core innovation highlighted by Bond is the platform's "hardware-agnostic" vision: next-gen Xbox will not be locked to a single digital storefront. Players will be able to access games from multiple PC storefronts—including Steam, Epic Games, GOG, and Battle.net—directly on the console. Microsoft is deepening integration with Windows to support side-loading and access to third-party stores, enabling titles purchased on PC to be playable on Xbox hardware and handheld devices.

The handheld side of the portfolio is embodied by the recently announced ASUS-made ROG Xbox Ally and Ally X devices. These Windows 11–based gaming handhelds boot directly into an Xbox-branded interface, giving quick access to a unified game library across Game Pass, Xbox Cloud, and PC storefronts. The Ally X model includes a powerful AMD Ryzen AI Z2 Extreme APU with dedicated NPU, along with advanced hardware features such as impulse triggers and 120 Hz Full HD display, positioning it as a strong competitor to the Steam Deck.

Tech analysis indicates that the next-gen Xbox silicon will deliver major performance gains over current systems. Custom AMD APUs with Zen 5 CPU cores and RDNA 3.5 GPUs will offer significantly higher compute power, assisting both full-console experiences and portable gaming platforms. The inclusion of AI optimizations and enhanced graphics technologies such as FSR and Radeon Super Resolution suggests that Microsoft intends to raise the bar on visual fidelity and responsiveness.

Although Microsoft has postponed its own first-party handheld in favor of partnering with third-party manufacturers, the long-term vision remains clear: Xbox as a flexible, inclusive gaming ecosystem that spans console, PC, cloud, and handheld platforms. By collaborating with ASUS and AMD, and enabling multi-store access, Microsoft is working to eliminate digital storefront lock-in and deliver seamless gaming across devices. This strategy highlights a shift in console philosophy—moving away from proprietary “walled gardens” toward an open, interconnected ecosystem.

Sources: The Verge, TechSpot, Polygon

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