Microsoft has paused the development of its own Xbox handheld gaming device, shifting its focus to third-party portable options like the ASUS Project Kennan, which is expected to launch later this year. This strategic shift comes after Xbox boss Phil Spencer previously hinted at creating an Xbox-branded handheld since 2017. Although internal development is sidelined, Microsoft still aims to create a native Xbox handheld by 2027 while improving gaming performance on Windows 11 for third-party devices. Project Kennan is nearly complete in terms of hardware, but Microsoft is enhancing software experience before the launch, as competition grows from other handheld systems such as Valve's Steam Deck.

Will Microsoft ever release its own handheld gaming device?

While the development of a native Xbox handheld is currently sidelined, Microsoft retains ambitions for the project and is investing heavily to deliver it by 2027. In the meantime, they are focusing on developing third-party partnerships and improving Windows 11's gaming performance.

Microsoft has been contemplating a handheld gaming device since 2017, with notable discussions around portable gaming intensifying in recent years. The increasing demand for portable gaming solutions has led to greater competition, especially with other companies like Valve venturing into the handheld market. The anticipated ASUS Project Kennan could set the stage for Microsoft’s long-term involvement in the portable gaming segment, showcasing their adaptability in a rapidly changing gaming landscape.