Microsoft is making decisive moves into the handheld gaming market with plans for an Xbox-branded device set to launch in late 2025, according to recent reports from Windows Central. The device, codenamed “Keenan,” is being developed in partnership with an unspecified PC gaming manufacturer.
Key Device Details
The upcoming handheld will run on a full version of Windows, allowing users to access multiple gaming platforms including Steam, Epic Games Store, and Xbox Game Pass. It will feature distinctive Xbox branding and the iconic Xbox guide button, aiming to create a seamless gaming experience that bridges the Xbox and Windows ecosystems.
“I want my Lenovo Legion Go to feel like an Xbox,” Phil Spencer, Microsoft Gaming CEO, told Polygon. “I’m on the airplane and I have this list of everything that makes it not feel like an Xbox. Forget about the brand. More like: Are all of my games there? Do all my games show up with the save that I want?”
Market Context
This handheld enters a competitive market currently dominated by devices like the Steam Deck, Nintendo Switch (which has sold over 139 million units), and ASUS ROG Ally. The handheld gaming market has shown significant growth, with portable gaming devices becoming increasingly popular among both casual and hardcore gamers.
The device appears focused on providing both robust offline gaming capabilities and cloud gaming features, potentially addressing common issues like streaming latency.
Technical Expectations
While specific hardware details remain unconfirmed, industry trends suggest the handheld might include:
- AMD processors and GPUs (similar to competitors)
- Sufficient RAM for modern gaming
- Windows 11 features optimized for gaming
- Xbox Game Bar with widgets for controlling TDP and fan speed
- Price point comparable to other gaming handhelds in the market
Future Hardware Plans
According to Windows Central, this partner-built handheld in 2025 is just the first step in Microsoft’s hardware strategy:
- The 2025 “Keenan” device: Partner-built, Windows-based Xbox handheld
- A 2027 hardware launch: Microsoft’s own proprietary Xbox handheld
- Next-gen console: Xbox Series X successor also planned for 2027
“Xbox’s next-gen hardware plans include a premium successor to the powerful Xbox Series X, alongside its own Xbox gaming handheld, and several new controller options,” reports Jez Corden from Windows Central.
The future consoles will reportedly feature deeper Windows integration, backward compatibility, and possibly support for third-party storefronts like Epic Games Store and Steam.
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Business Strategy
This hardware push comes during an interesting phase for Xbox. Console hardware sales have been declining quarter over quarter, while Xbox’s monthly active user base has grown significantly following the Activision-Blizzard acquisition.
The company has recently put previously exclusive titles like Forza Horizon 5 on PlayStation platforms to increase profitability, raising questions about their commitment to hardware. This new roadmap suggests Microsoft plans to continue supporting dedicated gaming hardware while expanding its multi-platform approach.
Xbox president Sarah Bond has announced a project team focused on promoting backward and forward compatibility for existing Xbox games, suggesting these future devices will maintain access to users’ existing game libraries.
Industry Perspectives
Industry analysts view Microsoft’s entry into the handheld market as a strategic move to capitalize on the growing portable gaming segment. However, critics emphasize that success will depend on creating a user-friendly Windows interface optimized for handheld use.
The device will likely serve as a research platform for Microsoft, testing new Windows 11 “device aware” capabilities while reducing the third-party bloatware that typically comes with devices like the Lenovo Legion Go and ASUS ROG Ally.
What’s Next
Microsoft has not officially confirmed these plans. When Microsoft might announce this device remains to be seen, but the company has historically made hardware announcements ahead of major industry events.
This handheld strategy, combined with the planned 2027 hardware refresh, suggests Microsoft remains committed to dedicated gaming hardware despite its recent multi-platform approach. As Phil Spencer put it when discussing hardware plans with Bloomberg earlier this year, the company is still thinking about what an Xbox handheld could be—it just might arrive sooner than expected