Report: Xbox-Branded Third-Party Handheld May Be Coming Later this Year

The first Xbox-branded gaming handheld may come as soon as this year, but it may not be made by Microsoft. Windows Central’s Jez Corden is reporting today that the first official Xbox gaming handled could be manufactured by one of Microsoft’s PC partners, but it may still ship with Windows 11.

Phil Spencer, the CEO of Microsoft Gaming confirmed in an interview from November that Microsoft was working on its own Xbox handheld prototypes but said that an official launch was still a few years out. However, this statement wouldn’t necessarily contradict a third-party manufacturer releasing an Xbox-branded handheld in 2025.

“Codename “Keenan,” this gaming handheld will look unmistakably “Xbox” we’re told, complete with an official Xbox guide button, and Xbox design sensibilities,” Corden reported. “Given that this is a partner device, similar to Lenovo’s SteamOS partnership with Valve, I expect this handheld to be more PC-oriented. It’ll most likely run full Windows, putting the Microsoft Store and PC Game Pass front and center, alongside the ability to install things like Steam.”

Corden added that this first third-party Xbox handheld may be part of a “research experience” to test the market for other PC manufacturers. Compared to existing Windows-based gaming handhelds, Xbox-branded devices may also offer a bloatware-free experience and some specific UI/UX optimizations.

“ I expect the handheld will test new Windows 11 “device aware” capabilities, while reducing third-party OEM bloatware that are typical of devices like the Lenovo Legion Go and ASUS ROG Ally,” Corden said. “I expect Microsoft will leverage widgets on the Xbox Game Bar on PC for controlling things like TDP and fan speed, while hopefully having a more streamlined OS experience for controller use.”

There’s certainly work to be done to optimize Windows 11 for handheld devices, especially when Valve is making SteamOS, the OS that runs on its Steam Decks installable on other handhelds. Microsoft should worry that PC manufacturers prefer to ship gaming handhelds with SteamOS, which is free, rather than paying for a Windows license.

While we may see third-party Xbox handhelds before Microsoft also releases one, Corden also shared some new information on the company’s next-gen console plans. “For now, I understand that Microsoft’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. Tentatively, it seems these new console devices are slated for 2027,” the report reads.

Lastly, Corden believes Microsoft will make it easier for game developers to port their PC games to Xbox consoles. “It seems that the next-gen Xbox consoles will be closer to Windows than ever before, reducing the amount of work developers have to commit to when porting from PC. I understand that they will continue to sport backwards compatibility with legacy Xbox games too, however,” he added.

There are still a lot of unknowns regarding Microsoft’s software plans. Phil Spencer previously suggested that the company may allow the Epic Games Store and other game stores on future Xbox consoles. Such competition would threaten Microsoft’s 30% cut on games sold through its Microsoft Store, which is how console manufacturers have been making money from devices sold with razor-thin margins. Lastly, it’s not clear how Microsoft could continue requiring Xbox players to pay for online multiplayer if the company starts allowing games from third-party stores on its consoles.