Microsoft’s High-End Handheld ‘Xbox’ Stuns with Alarming Price Tag

When the brand-name tech giant Microsoft publicly declared its debut date for the pioneer Asus-powered handheld gadgets without discussing their cost, there was an expectation that the unofficially noted prices were unjustifiably steep. Many speculated that Microsoft would offset the costs in a similar fashion to its strategy with the Xbox, but this didn’t end up being the case. The faith in a seismic price shift, similar to the reaction generated by the Steam Deck with its console-like pricing at $399, was thwarted by reality. The highly anticipated handheld ‘Xbox’ is priced at an alarming $1,000 for the premier tier and reduces to $599 for a version with lesser capabilities.

Pre-orders officially opened on Thursday for the ROG Xbox Ally X and ROG Xbox Ally which boast price tags of $999 and $599 in the US. In the global market, their respective prices set at €599 and €899 in Europe, £499 and £799 in Britain, and $799 AUD and $1599 AUD down under in Australia. A potential way to comprehend this steep pricing is by viewing these devices as personal computers instead of traditional gaming consoles, after all, they are Windows PCs at their core.

In this dynamic reality, the Xbox tag essentially represents a host of games, services, and a fresh full-screen experience sitting atop a Windows platform. It hints at what could possibly set the standard for the future of Xbox, and maybe for gaming consoles altogether. The paradigm of understanding video gaming consoles appears to be undergoing a transformative phase.

In the good old days, gaming consoles would become progressively more affordable – but that trend doesn’t hold true anymore. It was a widely acknowledged understanding in the industry that an early adoption of a newly launched gaming console was not a pragmatic decision. Initial model iterations were more expensive, had a limited game library, and typically lacked features introduced in future iterations that were not only less expensive but also qualitatively superior.

Contemporary observers who took the plunge and bought a console at the time of launch are now being hailed as forward-thinkers. The reason? Gaming consoles have been unrelenting in their upward price surge. The narrative of Microsoft and Sony cushioning the heavy price tag of their gaming consoles – sold at a deficit and earnings recouped through game sales and additional services – is being slowly erased.

Indeed, Microsoft’s Lori Wright acknowledged in 2021 that the Xbox followed this model. However, it is becoming increasingly evident that this business model is losing its relevance. In this calendar year, the price tag of an Xbox Series X is marked up by $150 compared to its cost the previous year, potentially induced by tariffs. Despite these subsidies, Xbox consoles’ sales have been dwindling through recent generations.

The narrative of Xbox has now shifted away from hardware towards a focus on gaming content. In an attempt to augment game sales, Microsoft’s prime franchises are no longer boxed within the Xbox or even PC sphere. Unexpectedly, they have ventured onto rival platform PlayStation, where they occasionally claim chart-topping positions. Their instances can also be found in the cloud, implying Microsoft’s strategies to scale to mobile gaming.

The next conceptualization of the Xbox might actually be characterized by an array of PCs than staying in the realm of conventional gaming consoles. This has been the trajectory for more than a decade, which began when the Xbox effectively transformed into a PC, powered by Windows and based on an x86 AMD architecture.

This shift, however, does not spell the doom for the physical console. Instead, it is more likely to be perceived as a luxury item. And we all know, luxury comes with a price tag. Now, the burning question is – how far is Microsoft willing to push the envelope to ascertain the extent of its Xbox fan base’s willingness to afford a future console?

In the past, the gaming community’s protest against exorbitant prices has managed to keep the cost of consoles and games in check. As inflation continued to rise, alongside with game development costs, no company desired to break the delicate balance. Many industry stalwarts recall the time when Sony announced the 60GB PS3 priced at ‘$599 US dollars’, and since then, gaming corporations have been hesitant to cross that infamous line.

But recent events, including shortages and tariffs, presented the industry with a chance to attribute higher prices to external circumstances. Once prices start climbing, industry players are unlikely to revert to cheaper prices. This raises the question: How much will future generations of Xbox, or even PlayStation, cost now that the once-clear boundary seems to be crumbling?

The selling success of the Xbox Ally will undoubtably play a significant role in determining the cost of subsequent gaming consoles. However, one must be somewhat skeptical about whether ‘the most significant technological leap in a hardware generation’ can really be made accessible and affordable.