In the never-ending console wars, it looks like Microsoft might be gearing up to throw out the rulebook – and maybe the whole library too. 

According to reports, the next-generation Xbox could run a custom version of Windows, support Steam, and offer full backward compatibility. 

That’s not just an upgrade. That’s a potential identity crisis. Or maybe, it’s a long-overdue evolution.

Why This Isn’t Just Another Rumor

First, let’s get this straight. This isn’t a random internet fantasy or Reddit wishlisting. 

The source of these claims is a Spanish leaker known as eXtas1s, with a decent track record with Xbox-related news. 

In a recent YouTube video, he claimed that Microsoft is working on a new Xbox console that would run a modified version of Windows, support PC storefronts like Steam, and offer full backward compatibility.

The details were later summarized in English on ResetEra by a user named P40L0, helping the rumor spread across the broader gaming community. 

Even possibly including a dedicated ‘Xbox mode’ launcher on top of Windows. 

While Microsoft hasn’t confirmed any of this (and probably won’t anytime soon), it certainly makes sense when you look at the direction Xbox has been heading. 

Xbox is no longer just a piece of hardware. It’s Game Pass. It’s cloud gaming. It’s the Xbox app on your PC.

So when someone says the next Xbox might just be a living room-friendly Windows PC, the real surprise isn’t the rumor – it’s that it hasn’t already happened.

Steam on Xbox? Why Not – They Already Share a Bed

Now let’s talk about Steam. 

Valve and Microsoft used to be slightly cold toward each other, especially when Windows 8 tried to become a walled garden. But now? They’re practically roommates. 

Steam runs perfectly on Windows. Microsoft has been adding more and more games to Steam. The Xbox controller is the go-to option for most Steam players. In some cases, Microsoft even allows you to link your Xbox and Steam accounts. 

And let’s be honest: the Microsoft Store is… not great. Steam is where PC gamers live. Supporting Steam on the next Xbox might be less about generosity and more about pragmatism. 

If you can’t beat Valve, join them – and maybe use their massive user base to prop up your console.

Backward Compatibility: Microsoft’s Underrated Power Move

The Xbox Series X is hands-down the most backward-compatible console on the market. It supports games from four generations – Original Xbox, Xbox 360, Xbox One, and Series X|S. 

You can play Knights of the Old Republic, Fable II, or Gears of War 3 without paying for a remake or subscription. 

Just insert the disc or download your old digital copy, and you’re good to go.

Many older titles look and run better, thanks to features like Auto HDR, higher resolutions, and faster load times. It’s not just support – it’s enhancement.

This kind of access is rare. Sony’s PS5 doesn’t support PS3 discs at all. And Nintendo locks most of its classic library behind paid online services. 

Microsoft, by contrast, is preserving its gaming legacy in a way that respects the player.

If the next Xbox runs Windows and supports Steam, backward compatibility could surpass consoles. You could run your entire game library across decades and platforms with no emulators, just Windows doing what it does best.

That’s more than a feature. It’s a reason to stick with Xbox. Or to finally switch. 

Is This About PlayStation? Of Course it is

Let’s not pretend this is happening in a vacuum. 

The PlayStation 5 is dominating this console generation. Sony’s strategy has been aggressive and, frankly, smart. Exclusive titles. Strong global brand. A focus on cinematic single-player experiences that people want to play. 

Microsoft tried to play the subscription game with Game Pass. It was a great idea, and it still is – but it hasn’t closed the gap. 

And then came the Activision Blizzard acquisition. That was supposed to be a game-changer. Instead, it turned into a regulatory circus and has yet to deliver a big shift in momentum. 

Call of Duty is still on PlayStation. Diablo IV didn’t launch as a Game Pass exclusive.

So what does Microsoft do when it’s behind? It opens up.

This isn’t the first time Microsoft has flipped the script. It open-sourced .NET, embraced Linux, and made Visual Studio Code free. The message behind these moves? We’re not the old Microsoft anymore — we’re the cool one now.

Now, that same logic might apply to Xbox. 

If people aren’t buying the Xbox for its exclusives, give them a reason to buy it for everything else. Steam, Windows, emulation, mods – these are things gamers want but don’t get from traditional consoles.

The Console That Isn’t a Console

Imagine a box under your TV that runs Windows, plays Steam games, runs emulators, supports Xbox Game Pass, and doesn’t care where your games come from. 

Call it an Xbox, call it a PC, call it ‘Xbox Fusion’ or whatever marketing comes up with. But that’s not a console in the traditional sense – that’s a lifestyle device.

And before you laugh at that phrase, remember the Steam Deck? That thing is a handheld Linux PC. People jailbreak it. They install Game Pass on it. They use it to emulate Nintendo games. Valve leaned into that openness, and it worked.

If Valve could do it with a $399 handheld, why can’t Microsoft do it with a $499 living room console? 

It’s About Ecosystem, Not Exclusives

Once upon a time, consoles lived and died by their exclusives. 

But Microsoft isn’t trying to sell you a box. It’s trying to sell you into an ecosystem. Game Pass. Xbox Live. Cloud saves. Achievements. Cross-play. Even the Xbox app on your phone.

By turning the Xbox into a Windows-powered hybrid, they make it easier to say: ‘You’re already in the Xbox world. You just didn’t know it yet.’

But Will People Buy it?

Here’s the catch: People who want a Windows gaming box… already own one. It’s called a PC. 

So the next Xbox must do something a regular gaming PC doesn’t. 

It needs to be plug-and-play. It needs to be cheap. It needs to be quiet, reliable, and hassle-free. No driver updates. No BIOS settings. No random crashes because Steam updated, and your mod loader broke. 

If Microsoft can pull that off and make a gaming PC that feels like a console, they might not win the generation, but they’ll win back a lot of goodwill.

And maybe even some market share. 

What This Means for the Industry

If the next Xbox truly embraces Windows and Steam, the lines between consoles and PCs will blur even further. 

Sony will feel the pressure. Nintendo probably won’t care. But developers? They’ll love it. One build to rule them all, with less fragmentation and more options. 

And if Xbox supports things like mouse and keyboard, mods, or even side-loading apps, it could become the best place to play, not because it’s a walled garden, but because it isn’t.

Xbox Needs a Bold Move – This Might Be It

The console wars are no longer just about graphics or frame rates. They’re about ecosystems. Microsoft tried going all-in on subscriptions, and it helped, but it wasn’t enough.

So now, it’s pivoting again. Steam support. Windows under the hood. Full backward compatibility.

It sounds wild. But it also sounds like the kind of disruption the gaming industry needs.

Don’t be surprised if the next Xbox is a Trojan horse PC for your living room. Microsoft’s been training this horse for years.