“All of the industry needs to start to innovate on affordability and efficiency” – Xbox’s Asha Sharma wants change and “more choice” for people buying consoles

As component prices balloon, the expectation Microsoft will take a different tack with the next generation of consoles has been reinforced by Xbox boss Asha Sharma, who has declared that “all of the industry needs to start to innovate on affordability and efficiency”.

Sharma, speaking to the BBC in an interview, said: “As an industry, we’re in the middle of ‘Rampocalypse’. All of the industry needs to start to innovate on affordability and efficiency. That is something that we have not had to do [previously].

“But with the crisis that’s currently happening in hardware and components, it is absolutely something all of us need to be thinking about and innovating on and giving people more choice in terms of how they play their console and how they purchase their console.”

This means Xbox needs to consider things like “hardware efficiency in terms of how you use storage and memory, the kind of price per unit, the components, things like that”, she said. “Our job as Xbox, as we continue on in our next generation, is to take into consideration what’s happening in the world and build the best experience for our players.”

The broader picture here is the component pricing crisis caused by huge AI datacenter demand for memory and storage chips that power gaming hardware. This is primarily what’s behind the unprecedented rise in console prices, though there are other mitigating factors.

“AI is fundamentally changing a lot of things” -Asha Sharma

Indeed, Microsoft raised the price of Xbox consoles again earlier this month, pushing a 512GB Xbox Series S to £430 (which launched at £250), and an 1TB disc-drive Xbox Series X to £670 (which launched at £450). “AI is fundamentally changing a lot of things,” Sharma said.

Asha Sharma has talked about this subject before, intimating in June that Microsoft is exploring new ways to sell Xboxes. “We’ve reached a point where it will be hard to imagine that mass audiences can afford thousands of dollars to spend on a console generation,” she said, “and so I think we will start to see radically different business models that we never expected start to come into orbit later this year.”

What those business models are, we don’t know, but something similar to the pay-monthly plan Microsoft offered when Xbox Series X/S launched makes sense. Back then, you could pay £20.99/$24.99/€24.99 a month for two years at zero percent interest, and a Game Pass Ultimate subscription was included. It’s a similar loan-type model phone providers have been using for decades, and it allows prices to remain high but be veiled somewhat.

Speaking of high prices: there are already reports Sony’s bill of materials cost for PlayStation 6 could be as high as nearly $1000.

A more unexplored part of Sharma’s remarks is her reference to efficiency, which could potentially mean bucking the trend of more power equals better console, or lessening this somehow – it’s something Nintendo has innovated around for years. If games are forced to wring more from available hardware and innovate in other ways than pushing fidelity, would that be a bad thing? We typically see plenty of game advancements even late into a console generation’s lifecycle.

Microsoft’s next Xbox console, Project Helix, has been vaguely talked about already. We know it will be some kind of console and PC hybrid, and that development kits won’t go out until next year. Microsoft has also just announced its disc-to-digital Xbox initiative to let players digitise their game discs so they can ‘own’ them as we move towards a worryingly discless future.

In the background, Sharma’s Xbox division is still reeling from wide-ranging restructuring, which left 1600 people without jobs and will leave a further 1600 jobless by next summer.