Xbox CEO Asha Sharma said the next-generation console, codenamed Project Helix, will emphasize affordability and efficiency while offering players a choice between physical and digital game purchases, according to a BBC interview in August 2026. She declined to confirm the presence of a disc drive, stating that Microsoft is focused on making the hardware cost-effective amid component shortages. “This next generation, we have to be thinking about efficiency and affordability alongside performance,” she said, adding that the industry needs to innovate on these fronts.

The company announced a disc-to-digital program on August 26 at Gamescom, which will let Xbox Insiders digitize physical games into an online library starting August 31, with broader availability to follow at an unspecified date. The initiative positions Xbox to differentiate itself from Sony, which plans to cease production of physical game discs in January 2028, a move that has drawn criticism from many gamers.

Rockstar Games has confirmed that Grand Theft Auto VI will be distributed via a digital code inside a disc case, and Take-Two Interactive chairman Strauss Zelnick said discs “don’t really make sense for the consumer.” Analysts note that the shift toward digital distribution could affect how future consoles are designed, but the final configuration of Project Helix remains undetermined.

The news comes as Microsoft undertakes one of its most significant corporate restructurings in recent years, seeking to streamline operations and reduce costs while maintaining a competitive offering in the console market.

The rollout of the digitization program will provide a clearer picture of how Microsoft intends to balance physical and digital options for the upcoming console generation.