Microsoft is shifting its resources and passing the ball for its Xbox gaming handheld to ASUS while internal development temporarily pauses. For some time it’s been known that Microsoft was working on entering the gaming handheld, which exploded with the launch of the Steam Deck, and while other manufacturers have released models which use Intel modible processors operating Windows 11, it’s been somewhat unknown exactly what type of OS would be utilized for the upcoming arrival. Now, according to Windows Central’s sources, it’s been claimed that the upcoming handheld will basically be a mobile Xbox.
“It was always a bit unclear if Microsoft’s handheld was designed to be a native Windows 11 PC gaming-style handheld, or more of a native Xbox console-style experience. But we potentially now have the answer.”
-Jez Corden, WIndows Central
Apparently, the goal for Microsoft’s offering is for it to run full Xbox games natively using a custom Xbox OS. “Project Kennan” is the codename for ASUS’ model, which is said to be among the first gaming handhelds to use the AMD Z2 Extreme APU featuring 8-cores/16-threads with a boost clock up to 5 Ghz and configurable TDP of 15-35W featuring AMD Radeon Graphics with 16 cores that supports many modern AMD technologies. It has also been confirmed that “Project Kennan” will not be based on ARM, so it seems that Microsoft is providing support to ASUS in implementing its own custom Xbox-style OS. Both companies are said to be nearing the finish line with their hardware, but it would seem that Microsoft considers it more prudent to assist ASUS in launching its model first.
Xbox Showcase 2025
Xbox Showcase 2025 is right around the corner and will happen in a couple of weeks on June 8. Aside from new game reveals and upates, there could possibly be more information provided about these gaming handhelds. Windows Central also reports that Microsoft is working on its own cloud-based gaming service, similar to NVIDIA’s GeForce Now, and has made significant progress with its internal testing. Microsoft has clearly strategized 2025 to be a big year for Xbox, coming up on its 24th annivesary, with numerous exclusive titles launching on PS5 and making sales records, with more on the way, not to mention new multiplatform releases as well, so it makes sense that the console manufacturer is looking for ways to continue the momentum for the Xbox brand.
Discussion (10 replies)
Join Discussion →I have my doubts about it being an actual Xbox handheld and think it will probably be an xbox cloud/pc gamepass portable.
I think MS should licence the xbox brand to handhelds manufacturers, at least initially. Then go with "desktop" consoles.
no need for the xbox handhelds to run native xbox games, just pc game pass games and xbox cloud, they could even throw steam games while you are at it.
This is clearly a move because MS is actually afraid of being washed out of the hand held market by Steam OS. And honestly from what EVERYONE who has owned one and reviewed one and compared to MS handheld performance... they SHOULD be. Microsoft is well and truly screwed here.
Who would have known that after all the years of SteamOS failures it would come back from the dead on a handheld.
MS better release a "Windows Gaming" or Xbox OS for PC version or something like that. Steam is ready to go for the desktop market yet again.
If MS wants to be REALLY smart... they would release a partnership with Steam and have the SteamBox but the problem there is you can't make them at a loss and count on licensing to bridge the gap to profitability. They would need another avenue.
This was a pragmatic decision, imo
Earlier the surface team were supposed to be working on handheld
It is well known that surface team is anti-amd which would have resulted in an all-intel or arm-nvidia handheld
While not bad, such a move would have been a serious own-goal
This is how Microsoft is combining Windows and Xbox for handheld PCs
Two new Xbox Ally devices introduce Microsoft’s much-needed improvements to handheld gaming PCs.
by Tom Warren
Jun 8, 2025, 10:40 PM GMT+5:30
Microsoft and Asus have just announced two ROG Xbox Ally devices that include a new full-screen Xbox experience for handhelds. After promising to combine “the best of Xbox and Windows together” for handhelds earlier this year, Microsoft is now revealing exactly how it is overhauling the Xbox app, Game Bar, and Windows itself to better compete with SteamOS.
https://www.theverge.com/news/68201...pc-combination-features-rog-xbox-ally-devices
The Xbox full-screen experience is very much the compact mode of the Xbox app taking full control of the ROG Xbox Ally devices, instead of the familiar Windows desktop and taskbar. “When the player boots into the full-screen experience there is a whole bunch of Windows stuff that doesn’t get loaded,” says Beaumont. “We’re not loading the desktop wallpaper, the taskbar, or a bunch of processes that are really designed around productivity scenarios for Windows.”
“Some of our early testing with the components we’ve turned off in Windows, we get about 2GB of memory going back to the games while running in the full-screen experience.”
“If you’re booting your device into the full-screen experience and you’re putting it down and it’s going to sleep, it draws one third of the idle power draw than if it was booting the same device into the desktop experience,”
Sones says Microsoft is “working closely with leading storefronts to have them optimize their full screen experience,” to make it easy for everyone to play a full library of PC games from Steam, Epic Games Store, and elsewhere.
“The aggregated gaming library within Xbox on PC will be available for all Windows 11 devices,” says Sones, so you’ll soon be able to see all of your Steam games within the Xbox app on any PC.
“The Xbox full-screen experience will first come to the ROG Xbox Ally and the ROG Xbox Ally X, and our next focus will be updating the in-market ROG Ally and the ROG Ally X,” says Sones. “Similar full-screen Xbox experiences will be rolling out to other Windows handhelds, starting next year.”
Microsoft would be targetting series S like sales. But the prices could be close to $1000
In February, industry research firm IDC told The Verge that the Steam Deck as well as Windows-based handhelds such as the ROG Ally totaled 1.5 million units sold in 2024.
Without numbers directly from the manufacturers, the estimates vary a bit.
Ampere Analysis sized the market of Steam Deck and other PC gaming handhelds at 5.3 million units sold, projecting growth to nearly 13 million in 2028, in data Ampere analyst Piers Harding-Rolls shared with Game File. The figures preceded today’s Xbox news.
Regardless of which count is more accurate, the totals are far less than the home consoles. Sony said PS5 sales from April 2024 through March 2025 reached 18.5 million units (Xbox doesn’t disclose their hardware sales but is assumed by analysts to be outsold by Sony by as much as two to one, still way more than the non-Switch handhelds).
https://www.gamefile.news/p/rog-xbox-ally-x-microsoft-handheld-windows-asus-hands-on
I included more of this in today's post as well.
[URL unfurl="true"]https://www.eurogamer.net/digitalfoundry-2025-xbox-ally-handhelds-microsoft-takes-its-next-step-towards-a-windows-driven-future[/URL]
"This new version of Windows doesn't boot into the desktop, it boots into new Xbox software. Access to your PC digital library - and indeed other non-Xbox storefronts - is also seamlessly integrated, making it a one-stop shop for your games library. Intriguingly, the Asus Armory Crate (used for custom tweaking of the device) is also integrated into the Xbox Ally's iteration of Windows. On a broader level, xinput compatibility for functions within Windows such as PIN input and UAC prompts is also baked into the new version of the OS, replacing prior feeble and unreliable third party attempts to get this working.
Windows itself has apparently been 'debloated' to a certain extent, offering up more system memory for the games themselves, while sleep time is expected to increase by a factor of 3x based on efficiency gains made by the Windows team."