Ask a hardware fan what’s exciting about 2026 and you might get the same two answers: Valve’s Steam Machine finally shipping, and Microsoft quietly plotting a very different Xbox for 2027. AMD’s recent earnings call put both in sharper relief — and, in doing so, sketched out how consoles and PCs are blurring in ways that could be thrilling and awkward at once.
AMD’s CEO Lisa Su told investors that Valve’s long‑teased Steam Machine is on track to ship early this year, while work on Microsoft’s next‑gen Xbox semi‑custom SoC is progressing to support a 2027 launch. Those are short sentences that carry big implications.
Steam’s box arrives — but it’s not a graphics revolution
Valve’s design will lean on AMD silicon, but not the very latest GPU microarchitecture. Multiple accounts indicate the Steam Machine uses an RDNA 3.5‑based GPU — a sensible choice for a hybrid device where clever upscaling will do heavy lifting for 4K aspirations. Valve has been positioning the hardware as a PC‑forward living‑room device rather than a direct Series X competitor, and AMD’s confirmation makes the timeline real.
If you’ve followed Valve’s handhelds and SteamOS tweaks, this is the next logical step: a console‑like appliance that still lives inside the PC ecosystem. Valve’s iterative updates to handheld features — like recent power and download improvements on the Steam Deck — show the company is focused on practical polish as much as raw spec sheet numbers. See the Steam Deck low‑power download feature for how small system refinements can matter in day‑to‑day use: Steam Deck low‑power download mode.
Magnus, RDNA 5, and a chip that wants to be a PC
On the Xbox side, AMD’s comments echo leaks and rumors suggesting Microsoft is building a “PC‑like” console. Fragile rumors have pointed to a massive semi‑custom APU nicknamed Magnus: a 408 mm² chiplet package with a 144 mm² SoC die (N3P) and a 264 mm² GPU block. Leaks suggest up to 11 CPU cores (three Zen 6 plus eight Zen 6c), 68 RDNA 5 compute units, at least 24 MB of L2 cache, and up to 48 GB of GDDR7 on a 192‑bit bus — plus a dedicated NPU that could deliver heavy on‑device AI, allegedly up to 110 TOPS.
Take those numbers with the usual grain of salt — AMD confirmed Microsoft’s project timetable, not the exact spec sheet. Still, the framing matters: Microsoft appears intent on a premium, PC‑grade experience that is more open than prior consoles, potentially supporting multiple storefronts like Steam, Epic, and others. That strategy flips the conventional console playbook: instead of locking players into a curated store, Microsoft may be aiming for the convenience and reach of PC ecosystems while retaining a console price‑and‑polish identity.
Why this matters — and why it could be messy
There are two big reasons to care. First, if Microsoft really ships a high‑end, PC‑adjacent Xbox in 2027, it could change where and how major games appear — and reshape the economics for developers and publishers. Second, execution won’t be easy.
Making a Windows‑style environment feel as frictionless and reliable as a purpose‑built console is hard. Recent hardware experiments — like the Xbox Ally handheld — have exposed friction points when Windows updates collide with device features, and the learning curve for packaging a controller‑first, TV‑ready Windows experience remains steep. Microsoft’s engineers know it; the company has signaled internal efforts to shore up Windows’ stability and gaming polish. If Microsoft can’t close that gap, a device that is “like a PC” could feel like a PC when people least want it to: fragile and fiddly.
Gizmodo and other outlets have also highlighted market headwinds heading into 2026. AMD warned that semi‑custom SoC revenue will fall by a significant double‑digit percentage as the current console cycle ages — a reminder that launching premium hardware during a slow refresh cycle is risky. Add higher component pricing (memory shortages, tariffs) and the prospect of a premium price tag, and convincing a mass market to upgrade becomes a tall order.
Sony, by contrast, seems to be taking a more conservative route with the PlayStation lineage — refining a traditional console experience rather than reimagining it as a PC. That contrast matters because the industry doesn’t need two companies chasing the same niche; it needs clarity and reason for players to care. For a glimpse at how Sony is iterating cloud and streaming options in the console space, see the recent PlayStation Portal cloud streaming update: PlayStation Portal cloud streaming update.
The long view: more choice, more friction
If both projects land as described — Valve shipping a Steam‑centric living‑room PC and Microsoft offering a premium, PC‑style Xbox — gamers win in raw capability and choice. But winners in choice aren’t always winners in convenience. A future where consoles feel like PCs could splinter expectations: some players will love the freedoms, others will miss the “it just works” simplicity that has defined consoles for decades.
AMD’s public timeline gives us two calendars to watch: a Steam Machine arriving in early 2026, and a possible Xbox launch window in 2027. Between now and then expect the usual mix of leaks, corporate posturing, and real technical tweaks. The industry’s balance is shifting; whether that tilt benefits players, studios, or hardware makers depends on execution as much as ambition.
One last thought: any company promising a hybrid console‑PC must be as good at software polish as it is at silicon design. Otherwise, the machine that wanted to be everything may end up pleasing no one.