Handheld Xbox Gaming Device Rumoured Again, Possibly Manufactured by Asus

While Microsoft has in the past confirmed that it is exploring the idea of a handheld Xbox console, no further details have been disclosed officially so far. We don’t know what it might look like or function like, but the emergence of Windows-based handheld gaming devices such as the Asus ROG Ally, MSI Claw and Lenovo Legion Go over the past few years, not to mention the Steam Deck and ever-popular Nintendo Switch have shown that consumers are likely to be receptive to such a product if it is confirmed.

The latest rumours suggest that Microsoft has tapped Asus to manufacture this device. Plans are reportedly at an advanced stage, and a launch could be announced this year. It is not yet clear whether Asus will only manufacture it for Microsoft, or whether it will be a co-branded product. Microsoft could also license the Xbox brand to Asus and possibly other partners, which would mean that the rumoured device is a next-gen ROG Ally with little more than a new Xbox button, software launcher, and store.

As reported by Windows Central and The Verge, the new device is codenamed Project Kennan and will have an Xbox software UI along with branding. Microsoft has been reportedly considering turning Xbox into a software platform, bringing it closer to its PC platforms and deprioritising console hardware as it competes with Sony’s PlayStation series.

Microsoft has already indicated that it plans to phase out physical game media, relying only on its online store and Xbox Game Pass subscriptions. However this new handheld would likely not be able to play current Xbox-exclusive games. Microsoft might offer official emulation, but is also likely to further deprioritise console exclusives.

Handheld gaming PCs such as the first-gen ROG Ally and the refreshed ROG Ally X have proven somewhat popular. AMD and Intel have both drastically improved the performance, power efficiency and integrated graphics capabilities of their processors over the past few years, indicating that future consoles based on their upcoming hardware will be capable of running modern games at even better quality settings, without getting too hot and requiring huge, heavy batteries.

However, software remains a stumbling block, with the Windows 11 UI not very well optimised for 7-inch screens. Microsoft’s new strategy could solve this, creating a simple, familiar UI optimised for small screens and handhelds.