Microsoft’s plans for a first party Xbox handheld have been cut short according to multiple sources, but new hardware is still on the table.
During the Xbox showcase last week, Microsoft revealed an Xbox handheld made in partnership with Asus, but it’s been known for a while that this isn’t the only portable device in development at the company.
Microsoft has discussed several times how it is working on prototypes for a handheld device, which is currently ‘a few years out’. While it was never explicitly stated it was assumed this device was part of Xbox’s plans for the next generation.
However, a recent report claimed Microsoft has ‘sidelined’ this handheld, to prioritise improvements to gaming performance on Windows 11. While this didn’t rule out a first party Xbox handheld in the future, a new source now believes it has been scrapped entirely.
According to The Verge, Microsoft has ‘essentially cancelled’ its own Xbox handheld in order to focus on its ‘new software platform’ – presumably something that can be used on multiple devices, with rumours suggesting Microsoft will encourage other hardware manufacturers to make Xbox-branded consoles in the future.
This has prompted some conflict among insiders. Windows Central’s Jez Corden has stuck by his original ‘sidelined’ claims in a post on X, writing: ‘Many believe that it has been cancelled, but Microsoft still ‘aspires’ to do it from what I’ve heard.
‘I think in reality it has been functionally cancelled, because what product ‘on hold’ has ever returned from the dead? We’ll see.’
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You might be wondering what the difference is, but the ROG Xbox Ally doesn’t actually run Xbox console games natively, only PC titles. Microsoft has an initiative called Xbox Play Anywhere, where you also get access to the PC version if you buy a game on Xbox, but this only applies to a select number of titles.
In other words, while the ROG Xbox Ally is often described as an ‘Xbox handheld’, it’s essentially a portable PC with Xbox features.
In recent years, Microsoft has pivoted its vision for Xbox into a multi-platform entity led by its Game Pass subscription service. This has been emphasised in Xbox marketing, which largely downplay its own Xbox Series X/S consoles.
While these reports of a cancelled handheld might bring into question Xbox’s plans for the next generation, Microsoft has publicly teased its next console on several occasions, with promises of the ‘biggest technological leap ever in a generation’ (thought to be a reference to AI).
If Microsoft does release another console, potentially in 2027, this new vision for Xbox as a service across multiple devices raises the question of whether it could be the company’s last – especially if it underperforms like the Xbox Series X/S.
For now though, we’ll have to see if the ROG Xbox Ally can surpass Valve’s Steam Deck in the handheld PC arena when it launches later this year.
Although considering Vale’s device has only sold around 4 million units worldwide, it’s difficult to imagine the ROG Xbox Ally having a significant impact.
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