Microsoft has made a strategic pivot regarding its gaming hardware ambitions, reportedly placing its Xbox handheld project on the back burner. This shift aims to enhance Windows 11’s performance for third-party gaming handhelds, a decision that could delay the anticipated launch of Microsoft’s own handheld device, originally slated for 2027, coinciding with the next generation of Xbox consoles.
According to Jez Corden from Windows Central, while the company remains committed to developing its Xbox handheld in the long term, current priorities have shifted towards optimizing Windows 11 for devices like ASUS’s upcoming “Project Kennan.” Corden noted, “Our sources have indicated to us that Microsoft is still deeply investing in developing its own Xbox gaming handheld technology in the future, but it was announced internally today that the priorities are moving more deeply towards third-party OEM handhelds in the interim.”
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Corden speculates that Microsoft envisions its Xbox handheld as a device capable of running the full suite of Xbox games, distinguishing it from existing Windows-based gaming handhelds that primarily support PC games. The ASUS Project Kennan, an Xbox-branded handheld expected to be unveiled later this year, will also operate on Windows 11 but will be limited to PC titles.
This recent shift in strategy may be a response to the competitive landscape, particularly the emergence of Valve’s SteamOS, which poses a challenge to Windows-based gaming handhelds. Unlike Microsoft, Valve provides SteamOS free of charge to hardware manufacturers, which could be a significant advantage. A recent video by YouTuber Dave2D highlighted that SteamOS outperforms Windows 11 in terms of both performance and battery life on devices like the Lenovo Legion Go S.
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As SteamOS continues to evolve, it offers a user-friendly experience that may further entice gamers. Currently, it is supported on Valve’s Steam Deck and the Lenovo Legion Go S, but Valve is actively working to broaden its compatibility with additional gaming handhelds. The platform not only provides access to a vast library of Steam games but also allows users to switch to desktop mode for installing other game launchers, including Nvidia’s GeForce Now cloud gaming service.
Earlier this year, Jason Ronald, Microsoft’s new VP of Next Generation, hinted at the company’s ambition to create a seamless Xbox-like experience on PCs. He stated, “The reality is the Xbox operating system is built on top of Windows. So there’s a lot of infrastructure that we built in the console space that we can bring to the PC space and really deliver that premium gaming experience on any device.”
However, the path to making Windows 11 competitive with SteamOS on gaming handhelds remains uncertain. SteamOS offers a streamlined, console-like experience that sidesteps the complexities associated with managing Windows, including drivers and app updates. Additionally, Valve is rumored to be optimizing SteamOS for console-like devices intended for living room use, which could pose a significant threat to traditional gaming consoles from both Xbox and PlayStation.
