Former PlayStation boss Shawn Layden has stirred the console waters by suggesting that the Xbox Series X might be Microsoft’s version of the Dreamcast — Sega’s final foray into the console market before pulling out entirely. According to Layden, the direction Xbox is heading in could mark the beginning of the end for Microsoft’s traditional hardware ambitions.

The comparison to the Dreamcast, a console that was beloved but ultimately failed commercially, implies that Xbox might be facing a similar fate if it doesn’t manage to turn things around. With the Series X not dominating the market as hoped, and Microsoft increasingly focusing on services and subscriptions over exclusive hardware, Layden believes this could be a pivotal moment for the brand.

However, Microsoft has not hinted at any plans to exit the console space. On the contrary, Xbox leadership has repeatedly assured fans that more hardware is on the way and that Series X is far from the company’s swan song. The strategy seems more about expanding the Xbox ecosystem beyond a single box, rather than abandoning it altogether.

This is evident in Xbox’s shift toward multiplatform releases. More and more first-party games are launching on PlayStation and Nintendo consoles, with Microsoft aiming to bring its software to as many players as possible. This approach is a major evolution in how Xbox defines success—less about unit sales and more about reach.

Whether Xbox’s strategy proves to be a smart adaptation or the beginning of a hardware retreat remains to be seen. But Layden’s comments highlight a growing tension in the industry: is the future of gaming defined by the box under your TV, or the ecosystem that connects everything?

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