Xbox’s Next Big Move: Handheld Console and Next-Gen Hardware in the Works
Microsoft is making a bold play in the gaming world with the reported development of an Xbox-branded handheld gaming device, potentially launching as soon as late 2025. According to Windows Central, this project—codenamed “Keenan”—is being built in partnership with a major PC gaming manufacturer such as ASUS, Lenovo, MSI, or Razer. If the reports hold true, “Keenan” could position Xbox to compete directly with the Steam Deck and other portable gaming systems, offering a unique blend of console-like simplicity and PC-level flexibility.
While Xbox console sales have been declining quarter over quarter, Microsoft’s overall gaming reach has been expanding rapidly. The company’s acquisition of Activision-Blizzard has brought in massive franchises like Call of Duty, World of Warcraft, and Overwatch, along with mobile powerhouses such as Candy Crush Saga and Diablo Immortal. This influx of new players has caused Xbox’s monthly active user base to skyrocket, solidifying its influence in the gaming market. Yet despite this success, Microsoft’s long-term hardware strategy has remained somewhat unclear—until now.
Xbox’s First Handheld: What to Expect
Sources indicate that “Keenan” will deliver a distinctly Xbox experience, complete with an official Xbox guide button and the brand’s familiar design language. Unlike standalone consoles, this handheld will reportedly run a full version of Windows, allowing access to the Microsoft Store, PC Game Pass, and third-party platforms like Steam.
This suggests Microsoft is aiming to merge the flexibility of PC gaming with the streamlined console experience Xbox users expect. The handheld is expected to leverage Windows 11’s “device-aware” capabilities to adjust performance based on usage. Users could gain control over technical settings like fan speed and power consumption through Xbox Game Bar widgets—features that could give “Keenan” an edge over competitors like the Lenovo Legion Go and ASUS ROG Ally.
But the handheld isn’t just about hardware. Microsoft appears to view it as a strategic testing ground for improving the Windows-based gaming experience. Reducing the bloatware that often clutters PC gaming devices could create a cleaner, more intuitive platform, which could influence future Xbox hardware and software design.
Next-Gen Xbox Consoles Are Already in the Works
Beyond the handheld, Microsoft’s larger console strategy is also starting to come into focus. According to Windows Central, Microsoft’s successor to the Xbox Series X|S platform has already been approved at the highest levels, including by CEO Satya Nadella. Plans reportedly include a premium successor to the Series X, the Xbox-branded handheld, and a series of new controller options—all tentatively scheduled for a 2027 release.
While Microsoft has recently expanded its reach by bringing Xbox exclusives like Forza Horizon 5 to PlayStation, this renewed investment in hardware suggests that the company remains committed to building the Xbox ecosystem. The strategy appears to be two-pronged: grow the Xbox brand by meeting players on other platforms while still delivering cutting-edge hardware to loyal Xbox users.
Why It Matters
Microsoft’s hybrid approach—blending console and PC-style hardware—marks a strategic shift for the Xbox brand. The handheld could allow Xbox to tap into the growing portable gaming market, challenging established players like Valve’s Steam Deck and Nintendo’s Switch. At the same time, the development of a more powerful next-gen console signals that Microsoft isn’t stepping away from the traditional home console market.
By creating a handheld that functions as both an Xbox console and a Windows-based gaming PC, Microsoft is positioning itself to offer a unified gaming experience that could appeal to both console and PC gamers. If “Keenan” delivers on its potential, Xbox could evolve from a console platform into a versatile, cross-device gaming ecosystem.
