Going back to November of last year, we’ve seen reports of am Xbox handheld being in development, including a confirmation by Microsoft Gaming head Phil Spencer. Beyond the first-party model, the company is also working with partner OEMs for Xbox-branded handhelds, with one of them being Project Kennan by ASUS. But today, reports have emerged claiming that the company is shifting priorities away from the first-party handheld, focusing instead on optimising Windows 11 for gaming handhelds.
This comes courtesy of Windows Central, which says that while Microsoft still wants to build its own Xbox handheld, it is instead prioritising partner devices like the aforementioned Project Kennan, which runs on Windows. The shift in priorities may have been prompted by reports of SteamOS providing a better experience overall – from faster framerates to longer battery life – on equal hardware.

It’s worth mentioning at this point that prior reports also made mention of a Project Bayside, which was described as presenting a common UI across multiple devices to help combine Xbox and Windows. But it was previously unclear if the first-party Xbox handheld was going a Windows 11 PC or a portable console. That said, the Windows Central report implies that it’s meant to be the latter.
The report also reiterates that Project Kennan by ASUS is still targeting a launch later this year. No mention of a date for the first-party Xbox handheld, which was previously planned to go into the world in 2027 alongside the new Xbox for the next console generation. That being said, development the console itself is claimed to be unaffected, and “continuing at full pace”.
(Source: Windows Central)