Microsoft's next-gen Xbox is being led by the Surface team, could be powered by Intel APU

Microsoft's next-gen Xbox console isn't being built by the team that led the charge with Xbox Series X/S consoles, but rather the Surface team is building the next-gen Xbox, according to the latest rumors.

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During a chat in the latest episode of the XboxERA podcast, according to XboxEra's own Nick Baker, that the person responsible for leading development of the Xbox Series X/S hardware -- Jason Ronald -- is not in charge of Microsoft's next-gen Xbox gaming device and that Microsoft's own Surface team replaced his team.

There's lots of news about Microsoft's next-gen Xbox hardware right now, with previous rumors that AMD won't get the contract for the new Xbox and that it's already got the contract to build an APU for Sony's next-gen PlayStation 6 console. Intel is reportedly stepping up into the ring and is thirsty to win a huge contract like building a chip for the next-gen Xbox, which would be a huge deal for the company -- a major win for a semi-custom SoC -- and it could be built in the United States.

We have heard rumors of Microsoft's next-gen Xbox being a gaming handheld, which would run games natively but also feature cloud gaming support. If we mix in the rumors that the Surface team is running the show at Xbox hardware development for next-gen, this kinda makes sense. Intel could build a monster APU for the new Xbox, and have better compatibility across PC hardware because of it.

I can't see Microsoft abandoning the physical Xbox console business and into handheld territory, but both of them at the same time would be nice. We've heard rumors that Sony is working on a next-gen PlayStation Vita 2, a new handheld for which AMD is also building a chip to power it.

That rumor is from Moore's Law is Dead, who said that the next-gen PlayStation handheld would be a weaker and portable version of the next-gen PlayStation 6 console for the Japanese market. It would be fighting gaming handhelds like the ASUS ROG Ally, Valve's Steam Deck, and Nintendo Switch 2 once it's released.

Whatever happens, the next-gen Xbox is coming... and we'll keep our ears to the ground for every bit of information on it.