An Xbox Series S hardware refresh was planned at some point, but the project was ultimately canned due to some concerns, according to rumors circulating online.
According to RedGamingTech, the Xbox Series S hardware refresh was planned to feature an RDNA 3-based GPU, a general increase to specs, more RAM, and even some machine learning features meant to power upscaling. The project, however, was canned quite early, so much so that even the system's APU wasn't fully fleshed out. An Xbox Series X refresh was also planned, but it was canned even earlier than the other refresh.
As for why the Xbox Series S and Xbox Series X hardware refreshes were canned, sources told RedGamingTech that it was due to a couple of concerns. First, Microsoft and some other developers were concerned about SKU saturation, as having four SKUs on the market at the same time would have led to a variety of issues. Additionally, regarding the Xbox Series S hardware refresh, there were also marketing concerns, as it would have been difficult to market a console that was more powerful than the base model but not as powerful as the Xbox Series X.
While the new information regarding the Xbox Series S hardware refresh is obviously unconfirmed, the concerns that led to its cancelation definitely sound valid and in line with previous statements from Microsoft, as the company considers the Xbox Series X as its mid-gen refresh and the Xbox Series its standard console.
With the current console generation entering its latter half, both Sony and Microsoft have started working on their next gaming systems. Very little is currently known about both of them, but they promise to bring a massive leap over current systems, something that, however, may come at a high cost for consumers.
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