Microsoft announced it has signed a multi-year partnership with the chip company to power its first-party devices, with the business promising “next-level performance, cutting-edge graphics, breakthrough gameplay, and unmatched compatibility”.

In a statement, Microsoft said: “[We're] announcing that we’re building the next-generation of Xbox first-party devices and cloud, including our future Xbox consoles, together with AMD.”

While Microsoft didn’t give any specifics on the partnership, the company said it was working to ensure everything would be “fully compatible” with users’ existing Xbox game library.

The statement continued: “We’ve established a strategic, multi-year agreement with AMD to co-engineer silicon across a portfolio of devices, including our next-generation Xbox consoles.

“Together, we’re delivering deeper visual quality, immersive gameplay, and AI-powered experiences - grounded in a platform designed for players, not tied to a single store or device, and fully compatible with your existing Xbox game library.”

In a video, Xbox President Sarah Bond said Microsoft was investing in the company’s “next-generation hardware line-up across console, PC, cloud and accessories” through the AMD partnership.

She added: “This is all about building you a gaming platform that’s always with you, so you can play the games you want across devices anywhere you want, delivering you an Xbox experience not locked to a single store or tied to one device.”

This comes just after Microsoft announced it had partnered with Asus to make the first Xbox handhelds - the ROG Xbox Ally and the ROG Xbox Ally X, which will run Windows 11 and allow players to access their existing Xbox games library and Game Pass.

While no price or release date has been confirmed yet, it is expected the two consoles will launch around Christmas this year.