May 30 2025 – Windows Central, a prominent tech media outlet, disclosed today that Microsoft is forging ahead with its Xbox handheld gaming initiative, albeit with a strategic pivot. Instead of focusing on developing an in-house Xbox handheld, the tech giant is now channeling its efforts into optimizing Windows 11 for third-party handheld devices.
Despite this shift in focus, Microsoft hasn’t shelved its ambitions for an Xbox handheld, which is still progressing alongside the development of subsequent Xbox Series X models. However, the current development emphasis has transitioned from crafting a native Xbox handheld to enhancing the Windows 11 experience on third-party OEM handhelds.
A cornerstone of Microsoft’s efforts is Project Kennan, a collaborative venture with ASUS. This handheld, slated for a potential release later this year, is nearing the completion of its hardware development phase. Both the Xbox and Windows teams are now laser-focused on refining the software experience.
The emergence of SteamOS poses a significant challenge to Windows 11, offering superior gaming performance and battery life. This has spurred Microsoft into accelerating its optimization efforts. While devices like the ASUS ROG Ally and the Lenovo Legion Go already run on Windows 11, there’s ample room for improvement.
Even with this strategic realignment, Microsoft isn’t abandoning its pursuit of a proprietary handheld. The company continues to invest heavily in the underlying technology. Meanwhile, the next-generation Xbox cloud gaming system is undergoing rigorous testing at Microsoft’s Redmond headquarters, aiming to bridge the latency gap with NVIDIA GeForce Now.
