Microsoft is reportedly developing an Xbox-branded gaming handheld device, marking its most significant push yet into the portable gaming market.
According to sources, the company is working with a PC gaming OEM to bring this device to market in 2025, while also preparing a first-party handheld for 2027 alongside its next-generation console.
Following a drop in hardware sales despite a growing Game Pass user base, Microsoft appears to be doubling down on new gaming devices. Windows Central reports that Microsoft is collaborating with an undisclosed PC gaming manufacturer on a handheld gaming device codenamed “Keenan.”
Expected to launch in 2025, the device will reportedly feature a distinctive Xbox design, complete with the signature Xbox guide button and full Windows compatibility. This suggests a device more akin to the Steam Deck or Asus ROG Ally rather than a standalone console.
If the reports are accurate, this would mark Xbox’s first major attempt at a dedicated handheld gaming device. Unlike PlayStation, which ventured into the handheld space with the PSP and PS Vita – the latter selling only around 16 million units compared to the PSP’s 80 million – Xbox has traditionally focused on home consoles. While Microsoft has experimented with cloud gaming on mobile devices and Game Pass integration, a physical handheld could be a game-changer.
ASUS ROG Ally
In addition to the handheld, Microsoft is also moving forward with its next-generation Xbox console, expected to launch in 2027. Sources suggest this new system will be a “premium successor” to the Xbox Series X and will be more closely integrated with Windows, streamlining game development between PC and console platforms.
In addition, a first-party Xbox gaming handheld is also reportedly in the works for 2027. Unlike the 2025 device being developed with a third-party OEM, this would be a fully in-house Microsoft product.
Sony’s previous handheld attempts saw mixed results. The PlayStation Portable (PSP) was a commercial success, selling over 80 million units, but the PlayStation Vita failed to gain traction, largely due to a lack of strong third-party support and the rise of mobile gaming. With Microsoft entering this market, questions remain about whether it can avoid the pitfalls that limited Sony’s handheld ambitions.
One potential advantage for Xbox is Game Pass. A handheld that integrates seamlessly with the subscription service could offer a compelling value proposition, giving players instant access to a vast library of games. Additionally, Microsoft’s push towards cloud gaming could enhance the handheld experience by allowing users to play high-end console games on the go.
More details will likely emerge as we approach the expected 2025 launch of the first Xbox-branded handheld.
