Microsoft has teamed up with AMD to develop next-generation Xbox hardware, including future first-party consoles.

"We're excited to collaborate with AMD on our upcoming Xbox consoles and cloud gaming devices," Microsoft announced in an online statement.

While specifics weren't disclosed, Microsoft pledged "groundbreaking performance, stunning visuals, innovative gameplay, and seamless backward compatibility" while ensuring all new hardware will work with current Xbox game collections.

"Our multi-year partnership with AMD focuses on custom silicon development for multiple devices, including next-gen Xbox consoles," Microsoft noted.

"This collaboration will deliver richer graphics, more immersive gaming, and AI-enhanced experiences through an open platform that preserves your existing game library."

Xbox president Sarah Bond revealed in a video that Microsoft is investing in "next-gen gaming hardware spanning consoles, handhelds, PCs, cloud streaming, and accessories."

The announcement confirms Microsoft's roadmap for both a traditional Xbox console and handheld device. Though release timing remains unspecified, Bond teased "we're eager to reveal what's coming"

Rumors earlier this year suggested Microsoft aims for a 2027 launch window for both devices, with the console reportedly adopting PC-like architecture and supporting third-party stores like Steam and Epic Games Store.

Bond's recent comments reinforce this direction: "We're creating a flexible gaming ecosystem that goes beyond single devices or storefronts, letting you play anywhere across multiple platforms."

"Our partnership with Windows ensures gaming experiences remain consistent across Microsoft's ecosystem," Bond added.

Meanwhile, Microsoft is preparing to launch Xbox-branded hardware collaborations later this year, including a Windows 11-based handheld gaming PC optimized for portable use.