Is Microsoft Really Coming Out With A Xbox Handheld? A Look At The Rumors Surrounding The Console

The market for gaming handhelds has exploded within the past couple of years. While the Nintendo Switch has remained the go-to option for budget-conscious buyers with a certain affinity for Nintendo's gaming ecosystem, hardcore gaming enthusiasts are finding a home within the Windows and Steam ecosystem of handheld gaming rigs. The biggest surprise, however, has been the absence of Microsoft, despite being the lead player across PC, console, and cloud gaming. That might change soon, albeit not directly.

Chatter about Microsoft's plans for gaming handhelds first intensified towards the end of 2024. The company's gaming chief, Phil Spencer, told Bloomberg that there's a certain expectation for a Microsoft handheld. "Although the company is working on prototypes and considering what it might do, Spencer also asked his group to look at the market and develop its vision based on what it learns. Such a device is a few years out," the report said. Interestingly, Spencer rejected the idea of an Xbox handheld back in 2014. 

In another Bloomberg interview, Xbox Vice President Sarah Bond also hinted at Microsoft's keen interest in the handheld gaming market. "I want people to think no matter who you are, you can come to Xbox and find a game," Bond was quoted as saying. In an interaction with IGN, Spencer also mentioned that being able to play games locally on a device is important when asked about the ideal traits of an Xbox gaming handheld. So far, Microsoft hasn't officially confirmed an in-house Xbox handheld, but such a product might come from elsewhere.

Microsoft has lately charged its efforts at improving the Xbox app, with a focus on creating a seamless experience across different form factors, including handhelds. In March of 2024, the first leak about an Xbox handheld emerged. Jez Corden at WindowsCentral reported on a device currently under development that will combine the Xbox formula with the handheld form factor. Codenamed "Project Kennan," the handheld device will reportedly combine the distinct Xbox styling with the fundamental looks of a handheld like those made by Lenovo or MSI.

The secretive Xbox handheld, however, won't necessarily bear the Microsoft or Xbox branding the way a first-party product like the Surface Laptop or the Xbox X/S. That's because Microsoft won't be making this console, after all. Instead, Windows Central reports it has partnered with Asus to build the device. According to these unconfirmed reports, it will feel similar to the Asus ROG Ally but with a few stylistic changes to the grip and button layout.

The device will reportedly be available in two variants, but the report is uncertain whether these are simply storage variants or if they will follow a two-tier performance approach by adopting different hardware. The biggest piece of the puzzle, however, is the silicon. The most likely candidate is the AMD Ryzen Z series, specifically the second-generation variants. If Asus targets price accessibility, the Ryzen Z2 Go seems like the best candidate. Else, we might get the vanilla Ryzen Z2 or even its top-of-the-line "Extreme" version. In terms of the estimated release window, Corden says 2027, but to take it with a "grain of salt." 

The biggest conundrum with the hypothetical Xbox gaming handheld (despite its Asus origins) is the asking price. Windows Central reports that the asking price could be familiar and palatable. "Our sources indicate that it won't be quite as cheap as the base model Steam Deck, but it won't be as expensive as the Lenovo Legion Go RRP. It'll be somewhere in the middle, with a base model price range of between $499 and $599 potentially, but like I said, do take that with a huge grain of salt," says Corden.

The handheld gaming console market is the most vibrant it has ever been, and we are not even talking about those cloud-first options like the Logitech G Cloud, retro warriors from Pocket and Retroid, or the Android-based, Qualcomm-driven options from the likes of Ayaneo and OneX. The Steam Deck continues to be a fantastic bargain, and then we have higher-end Windows-based options such as the Asus ROG Ally, Lenovo Legion Go, Acer Nitro Blaze, and MSI Claw. The likes of Dell have also given us glimpses of their own in-development versions, while smaller console developers continue to churn out intriguing ideas like the OneXPlayer 2 Pro.

As far as Project Kennan goes, it would entirely depend on how deeply Microsoft is involved. If the company wants to go all-in with it as a showcase of how powerful a gaming handheld can be, expect a premium price. But if accessibility and reach are priorities, a bit of a subsidized approach could land at a truly alluring asking price.

When you think of an Xbox-branded gaming handheld, you imagine the Xbox and its unique interface. But most importantly, the Xbox library of games. It seems the rumored handheld could deliver a suprise. As per Windows Central, the device in question is "a tried-and-true Windows PC in essence," similar to the Asus ROG Ally. That is both good and bad news. For Xbox enthusiasts, they may have to make compromises with accessing the full library of Xbox console games.

The good news is that they can still play a bunch of those games on the Windows-based handheld, as long as those titles fall under the Xbox Play Anywhere banner. These titles require a single purchase and can be played on PC as well as console. And yes, handhelds are very much a part of the compatibility group. Microsoft says there are roughly a thousand games that fall under the Xbox Play Anywhere. "At any single point in time, you may only sign into the game on one Xbox console, one Windows 10/11 PC, or one supported gaming handheld device," Xbox says.

Another huge advantage is that you are not restricted to the Windows ecosystem. Instead, owners can enjoy the Steam library or have a peek at virtually any other launcher, such as Battle.net, Riot, or GOG. Yes, Windows has received a fair bit of criticism over the lack of gaming-first optimization on handhelds, but it's hard to look past devices like the ROG Ally and its versatility at the same time.

As far as handhelds go, "Project Kennan" could redeem Xbox in the realm of handheld gaming consoles. Even if it's not a first-party Xbox handheld, Microsoft still has a chance it merely approaches it as a showcase. To begin, it could use a redesigned frontend that takes away from the clunkiness of Windows and delivers a pure Xbox-like game launcher experience. Or maybe something entirely different, with a bit of SteamOS inspiration thrown into the mix.

A handheld console needs a console-friendly interface, and that means a fittingly well-calibrated navigation experience and quick access to the tools gamers frequently need. Microsoft is certainly aware of the flaws. "We're focused on really simplifying that and making it much more like a console experience," Jason Ronald, a senior Microsoft executive, told The Verge earlier this year.

There's only so much that an OEM licensing Microsoft's OS can achieve atop a portable gaming device. In the context of gaming handhelds, Microsoft desperately needs to streamline performance by cutting down on the Windows OS tax, optimizing the battery life, and creating a software experience that is laser-focused on running a game and maximizing the best out of the available hardware.

Gaming isn't always about the latest AAA titles with ray-traced illumination effects. It's about the fun experience. Retro gaming is one such aspect. Project Kennan could be an opportunity to revisit the backward compatibility stack of Xbox and port it over to the Windows handheld formula. Bring back the classics, and you have an audience ready to relive their past memories of gaming indulgences. Look no further than Nintendo and the thriving emulation ecosystem around similar devices.