Microsoft is reportedly working on a handheld Xbox console, which is expected to launch later this year. According to a report from Windows Central, this device is being developed in partnership with major PC gaming hardware manufacturers. The list potentially includes electronics brands like ASUS, Lenovo, MSI, or Razer.
The handheld is said to run Windows, with Microsoft Store and PC Game Pass at its core. This suggests that the new Xbox handheld could resemble existing gaming PCs like the ASUS ROG Ally X or Lenovo Legion Go, rather than a fully custom-built console.
There’s no confirmation of unique hardware, but speculation points toward AMD’s Strix Point APU as the likely processor choice. The project codenamed “Keenan,” appears to be more of an experiment for Microsoft rather than a major revenue generator.
The company is shifting its Xbox ecosystem away from traditional console limitations, which makes gaming more accessible across different devices. If the handheld closely resembles existing PC gaming devices, its major innovation might come in software. Microsoft could introduce an optimized version of Windows with improved power management, better fan control, and enhanced support for controller-based gaming. A redesigned interface to improve touch input on a smaller screen would also be crucial.
Meanwhile, Microsoft is also preparing for the next generation of traditional Xbox consoles. CEO Satya Nadella has reportedly approved new versions of the Xbox Series S and X, set for release in 2027.
While hardware details remain scarce, industry speculation suggests the new consoles will incorporate AMD’s next-generation UDNA graphics architecture. It follows the recently launched RDNA 4-based Radeon RX 9070 GPUs.
These upcoming consoles are expected to blur the lines further between PC and Xbox gaming, which greatly reduces development work for game studios while ensuring backward compatibility with older Xbox titles.
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