Microsoft’s “This is an Xbox” marketing campaign in November always felt a little too early. If you ask a friend or family member what an Xbox is, the response is likely going to be “it’s a game console.” Xbox is ingrained in popular culture as a box under your TV that you play games on, but Microsoft’s ads over the past six months have been attempting to redefine the Xbox as a platform that spans across phones, laptops, TVs, handheld gaming PCs, and even VR headsets.
The ads did a great job of drawing attention to the platform, but the perception of the Xbox brand as just a console is still a huge challenge that Microsoft needs to overcome if its latest strategy is going to be successful. I can already sense some trouble ahead.
Ever since Microsoft unveiled its ROG Xbox Ally handheld devices earlier this month, I keep hearing from friends that are asking about an “Xbox handheld.” YouTubers with millions of followers have positioned these handheld gaming PCs as “the first Xbox handheld,” which is true if you believe in Microsoft’s marketing, but false in reality because they don’t natively run Xbox games, only PC versions.
Microsoft’s answer to this potential confusion is that the Xbox Ally devices will be able to stream your library of Xbox games from the cloud or another Xbox console. That’s not the type of experience I want when I’m spending hundreds of dollars on a piece of hardware that’s capable of running games without an internet connection. In reality, I get the sense that Microsoft is willing to gamble on the potential confusion here, because what it really wants to do is turn Xbox into Steam.
The Xbox Ally devices are the beginning of a next-generation gaming platform — a platform that looks increasingly like it will revolve around Windows. Xbox president Sarah Bond confirmed last week that Microsoft’s next console is “not locked to a single store,” just like Windows isn’t. Bond went even further, revealing that Microsoft wants to ensure “Windows is the number one platform for gaming.”
Microsoft has also started calling the Xbox app on Windows simply “Xbox PC,” in a clear bid to position it as a Steam competitor or alternative. This Xbox PC branding has appeared in trailers for games in recent weeks, but even Microsoft can’t decide whether it’s “Xbox PC” or “Xbox on PC” as it has used both recently. Either way has risk: Microsoft rebranded its Xbox Game Pass for PC subscription to just PC Game Pass four years ago because people were getting confused, so Xbox PC feels like it could be another source of confusion.
Bond’s video also shed some light on how the Xbox PC initiative will allow you to play Xbox games. While Bond largely talked about an AMD partnership for co-engineering silicon, she also confirmed that this next generation of Xbox devices includes “maintaining compatibility with your existing library of Xbox games.” That’s a promise that Microsoft hasn’t been able to deliver for the Xbox Ally devices, and it makes it seem like the company is confident it will deliver some form of Xbox game emulation on Windows for its next generation of devices.
Bond’s video wasn’t the only interesting Xbox release last week. AMD CEO Lisa Su also appeared in a short video and essentially laid bare Microsoft’s next-gen Xbox strategy: “Moving forward, AMD will go beyond building custom chips for Xbox consoles to designing a full roadmap of gaming-optimized chips, combining the power of Ryzen and Radeon for consoles, handhelds, PCs, and the cloud,” Su said.
That sure sounds like AMD and Microsoft are co-engineering chips for Microsoft’s own next-gen Xbox console, as well as third-party devices that will also be branded as Xbox consoles. Su also specifically revealed these chips will include the hardware support needed for backward compatibility, which suggests that you’ll need one of these chips for whatever emulation solution Microsoft is working on. I fully expect these next-gen chips will also form the basis for how Microsoft plans to license the software powering this Xbox experience to OEMs.
It feels like this future work with AMD is really what Microsoft means when it says, “This is an Xbox.” It’s an ambitious vision where Xbox games can be played across multiple devices, all with cloud saves so you can pick up where you left off. It’s also a clear reaction to SteamOS and the fact that OEMs are starting to show interest in Valve’s efforts to span its game library across console-like devices.
The challenge for Microsoft is making its own vision a reality and learning from its mistakes of challenging Steam in the past. In 2006, Microsoft cofounder Bill Gates outlined a similar vision for Xbox dubbed “Live Anywhere,” where Xbox experiences would come to Windows-based PCs. It was a response, at the time, to Valve’s launch of Steam a few years prior.
Microsoft launched its Games for Windows Live initiative with Windows Vista in 2007, designed as a way to unify the gaming experience across PC and Xbox 360 with achievements, online multiplayer, a friends list, and marketplace. Microsoft shut down the service six years later, after lackluster ports of Xbox titles and DRM mechanisms left PC gamers building up their library in Steam instead.
Nearly 20 years later, a lot of what Microsoft is saying today sounds like Bill Gates’ vision for Windows and the Xbox 360. The big difference this time around is that Microsoft isn’t in a position of strength in the console market like it was with the Xbox 360. That means it has to take a more open approach to overhaul what an Xbox is, like embracing rival stores on its next-generation devices or allowing OEMs to build their own Xbox devices. Microsoft’s opportunity here is to boot millions of Xbox devices into its own Xbox PC store and try to sell games and subscriptions directly to people instead of them turning to Steam.
There’s a clear revenue benefit to Microsoft here, especially if it can convert even a small percentage of Steam users into buying games from its own store instead of handing over a 30 percent cut to Valve. It will all come down to the console-like experience, with the Xbox “full screen experience” on Windows being a big first test.
If Microsoft can pull off this big bet of changing what an Xbox is, then these “This is an Xbox” ads will look like a prophecy. If it fails, then Microsoft risks damaging its last successful consumer brand, potentially beyond repair. The stakes for Xbox couldn’t be higher.
- Microsoft is planning “major” Xbox layoffs next week. I hinted that more Microsoft layoffs were coming earlier this month, and some major cuts are going to impact Xbox next week. Some managers have been briefed about the plans, and I keep hearing there will be significant layoffs impacting Microsoft Gaming. There’s online speculation that entire studios could be closed, and I’ve heard from sources that Turn 10, the studio behind Forza Motorsport, is bracing for cuts.
- Windows is getting rid of the Blue Screen of Death after 40 years. Microsoft revealed earlier this year that it was overhauling its Blue Screen of Death (BSOD) error message in Windows 11, and it has now confirmed that it will soon be known as the Black Screen of Death. The new design drops the traditional blue color, frowning face, and QR code in favor of a simplified black screen. I think that means we can still call it a BSOD, but it’s going to look a lot more like a regular Windows update screen than before.
- Microsoft makes Windows 10 extended security updates free, but there’s a catch. Microsoft originally wanted to charge people $30 for an extra year of Windows 10 security updates, but now it’s offering a free option — with a catch. If you’re willing to enable Windows Backup, which syncs your Documents folder and settings to the cloud, you can get Extended Security Updates for Windows 10 until October 13th, 2026. The only issue is you’ll need to ensure your Documents folder isn’t full of files, otherwise you’ll go over the 5GB of free OneDrive storage — and I’m sure Microsoft would love to sell you more space.
- Discord is working on a Windows on Arm app. Great news for Qualcomm Copilot Plus PC owners: a native Arm64 version of Discord is on the way. Discord confirmed its plans to The Verge earlier this week, but it’s not clear exactly when the Windows on Arm version will be released. The current app is very slow and laggy through emulation; I’ve been testing the native version of Discord on a Surface Pro 12-inch, and the difference is night and day. I’m still waiting for a native version of Premiere Pro, but Discord moving to Arm64 plugs another hole in the Windows on Arm universe.
- A week in Xbox VR with Microsoft and Meta’s new $399 headset. I’ve spent the past week testing out an Xbox-branded Quest VR headset. It went on sale for $399.99 earlier this week and comes bundled with an Xbox wireless controller, matching Touch Plus controllers, and three months of Xbox Game Pass Ultimate. While it’s not a true Xbox VR experience, the Xbox Cloud Gaming app is good enough if you really want to play Xbox games without a screen and dedicated console. This is yet another device that’s part of Microsoft’s “This is an Xbox” initiative.
- Windows 11’s indicators for volume and brightness can soon be moved out of the way. Microsoft has started testing a new feature in Windows 11 that will let you move hardware indicator pop-ups like volume and screen brightness. At the moment, they’re stuck at the bottom-center of a screen, but you’ll soon be able to move them to the top-left or top-center positions. It’s part of an update that also includes a new Recall homepage, which lists the top three apps and websites you’ve used in a 24-hour period.
- Microsoft’s new small language model is Mu. Microsoft has introduced a new on-device Mu model this week, and it’s going to power Windows 11’s new Settings AI agent. “Mu is fully offloaded onto the Neural Processing Unit (NPU) and responds at over 100 tokens per second, meeting the demanding UX requirements of the agent in Settings scenario,” says Vivek Pradeep, vice president and distinguished engineer at Windows applied sciences.
- Microsoft’s Xbox UI update lets you pin games and customize your homescreen. Microsoft is rolling out a new update to its Xbox Home UI that allows Xbox owners to pin apps and games on the homescreen. You can also customize the Xbox Home UI even further to hide system apps and reduce the number of apps and games listed. This should make it easier to see more of those Xbox Dynamic Backgrounds.
- Microsoft adds Steam games to its Xbox PC app on Windows. Microsoft is starting to test its new aggregated gaming library in its Xbox PC app on Windows. Xbox Insiders will be able to start testing this single launcher experience on Windows this week, and it will be identical to what ships on the ROG Xbox Ally handhelds later this year.
- Microsoft is blocking Google Chrome through its family safety feature. Microsoft’s Family Safety feature, primarily used by parents and schools as a set of parental controls and filters, started randomly blocking Google’s Chrome browser from opening on Windows earlier this month. Microsoft has now acknowledged the issue and provided a workaround while it works on a fix.
- Bill Gates and Linus Torvalds meet for the first time. Microsoft cofounder Bill Gates and Linux kernel creator Linus Torvalds have surprisingly never met before. Sysinternals creator Mark Russinovich hosted the pair and Dave Cutler, Microsoft technical fellow and Windows NT lead developer, at a dinner party recently. Cutler and Gates both got to meet Torvalds for the first time, and Russinovich joked that “no major kernel decisions were made.”
- Microsoft struggles to sell Copilot as businesses want ChatGPT instead. Bloomberg has taken a deep dive into the reality of Microsoft 365 Copilot and which businesses are actually paying to use it. Some have switched to OpenAI’s ChatGPT instead, putting Microsoft salespeople on the back foot in an increasingly complicated relationship between OpenAI and Microsoft.
- Microsoft starts to move antivirus providers out of the Windows kernel. A faulty CrowdStrike update took down 8.5 million Windows machines nearly a year ago, and now Microsoft is taking some big steps to make sure that never happens again. It’s starting to preview new Windows changes that will move antivirus (AV) and endpoint detection and response (EDR) apps out of the Windows kernel. It’s going to take some time to get this right, and Microsoft says it’s working closely with security vendors to make sure that the APIs it develops work well for these third-party solutions.
There won’t be a Notepad issue next week as I’ll be out on vacation, but I’m always keen to hear from readers, so please drop a comment here, or you can reach me at notepad@theverge.com if you want to discuss anything else.
If you’ve heard about any of Microsoft’s secret projects, you can reach me via email at notepad@theverge.com or speak to me confidentially on the Signal messaging app, where I’m tomwarren.01. I’m also tomwarren on Telegram, if you’d prefer to chat there.
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