What’s next for Microsoft’s Surface PCs?

Nearly 10 years ago I reviewed my favorite Surface device. Microsoft hand-delivered its Surface Studio all-in-one PC to me, and I was hooked from the moment I switched it on. It had a beautiful floating touchscreen that you could push all the way down into a drawing board mode, making it unlike anything I had seen in the PC market. But like many other Surface devices, it no longer exists.

Over the past few years, Microsoft has been steadily walking back from the experimental ethos that built the brand. The detachable Surface Book? Gone. The giant Surface Hub touchscreen displays? Gone. The Android-powered Surface Duo? Gone. Even the Surface Laptop Studio, which was supposed to replace the Surface Book, has been axed.

What’s left of Microsoft’s Surface devices has been reduced to just the Surface Laptop and Surface Pro, with a variety of different sizes and specifications. Earlier this month Microsoft launched its Surface Pro 12 and Surface Laptop 8 devices with Intel chips inside, and rumors suggest Qualcomm-powered consumer versions will be announced next month.

Both of the new Surface Laptop and Pro models are simply refinements of an existing formula and don’t push the categories forward in meaningful ways. The Surface Pro and Surface Laptop have matured to the point where Microsoft can launch smaller models that squeeze in more powerful chips, but apart from that, you know what you’re getting at this point. The real surprise is the pricing: Both start at an eye-watering $1,949.99, which could seriously hinder their adoption by the businesses they target.

There’s still a chance for Microsoft to launch a different kind of Surface, though. Months of rumors suggest Nvidia is about to enter the Windows on Arm market with its own chips, the N1 and N1X. Lenovo and Dell are rumored to be working on devices with Nvidia’s new chips, and recent reports suggest Nvidia will announce its Arm-powered processors at its Computex keynote this weekend.

Microsoft used Nvidia’s Arm-powered Tegra chips for its original Surface RT tablet in 2012, before partnering more closely with Qualcomm for its Windows on Arm efforts. It’s hard to imagine that Nvidia would be dipping its toes back into the Windows on Arm market without having renewed a close partnership with Microsoft.

The advantage of Nvidia’s new chips over Qualcomm’s existing offerings will likely be on the GPU side. That’s where Qualcomm’s Snapdragon X chips have been weaker than the competition, and Nvidia has an opportunity to really push Windows on Arm gaming laptops forward with a stronger GPU and better driver support.

Could we finally see a Surface gaming laptop? I’m not so sure Microsoft would be interested in this market itself, despite regular calls for an Xbox or Surface gaming laptop. Former Surface chief Panos Panay told me in 2022 that OEMs serve this part of the market well, so there was no need for Microsoft to do its own.

Where I do see the potential for a Microsoft and Nvidia partnership with these new chips is on the AI side. Nvidia isn’t a gaming company anymore, so if it’s launching new Arm-powered processors then you can bet they’ll be focused on powering local AI agents, too. I’m expecting Nvidia’s N1 and N1X chips to be tuned for AI workloads. Microsoft has been working hard to make Windows attractive to AI developers, so a Nvidia partnership here would make a lot of sense.

I’m also expecting Microsoft to continue the type of hardware work that leads to devices like its smart Surface camera. While this camera was primarily designed for the Surface Hub devices Microsoft is now giving up on, it’s the combination of AI and hardware that could be used in regular webcams down the line.

The future outlook for the rest of Surface still feels uncertain, nearly three years after Panay announced his departure. Microsoft’s changes to its hardware portfolio in 2023 hit the Surface unit heavily with layoffs, and the loss of leaders like Panay and former Surface design chief Ralf Groene have meant there’s no real face of Surface at Microsoft anymore. Instead of big onstage events, Microsoft has increasingly been announcing new Surface devices with blog posts.

I’m hoping we don’t see another round of layoffs before Microsoft’s new financial year starts in July, but as a company reshaping every part of its business around AI, nothing feels off the table. It’s still unclear where Surface fits into Microsoft’s AI future, but Nvidia’s new chips should drop some hints.

Early signals on Xbox Game Pass price changes

Xbox CEO Asha Sharma’s big decision to reduce Xbox Game Pass pricing sounds like it’s starting to pay off. In an internal memo to Xbox employees, seen by Notepad, Sharma revealed last week that there’s reason to be optimistic. “Growth slowed down and subscriber loss accelerated after the pricing and SKU changes last year,” said Sharma. “Since our price reduction we have seen acquisitions grow and retention improve, which is a good first step.”

It’s a very early sign that things are going in the right direction for Game Pass, but Sharma noted the team still needs to “build” on this and “learn quickly.” The memo certainly doesn’t read like a victory lap. “We will not solve this in one moment or one launch,” said Sharma. “We will have to outwork the problem in front of us in our path to restore durable growth.”

Sharma also briefly touched on the Xbox to XBOX rebrand, which Microsoft started working on earlier this month. “We are building a stronger XBOX. That means making hard choices about what we build, where we invest, and what kind of company we need to be going forward,” said Sharma. “That is part of what you are starting to see in the shift from Xbox to XBOX. It reflects a decision to be deliberate in how we show up for the players who care most about this brand.”

All eyes are now on next week’s Xbox showcase. After leaks of an Xbox cloud gaming controller and the Xbox Elite 3, it’ll be interesting to see what Microsoft officially unveils. With Xbox also celebrating 25 years, there may be room for something a little more tangible to mark the moment, too.

I’m always keen to hear from readers, so please drop a comment here, or you can reach me at [email protected] if you want to discuss anything else. If you’ve heard about any of Microsoft’s secret projects, you can reach me via email at [email protected] or speak to me confidentially on the Signal messaging app, where I’m tomwarren.01. I’m also tomwarren on Telegram, if you’d prefer to chat there.

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