In a significant strategic shift, Microsoft has reportedly decided to place its long-anticipated first-party handheld gaming device on the back burner. Instead, the tech giant is now concentrating its efforts on third-party portable gaming opportunities, most notably the ASUS Project Kennan, which is expected to launch later this year.
The discussion surrounding an Xbox handheld device dates back to 2017 when Xbox boss Phil Spencer revealed that Microsoft had previously designed such a product. Over the years, Spencer has revisited the topic multiple times, sparking speculation about a potential revival of the project. In March, reports from Windows Central suggested that Microsoft had adopted a multi-faceted approach to handheld gaming. The plan included collaboration with a third-party to release an Xbox-branded portable gaming PC under the codename Kennan while simultaneously developing its own device slated for release alongside the next-generation Xbox Series X/S in 2027.
However, new information from Windows Central indicates that Microsoft has recently undergone a strategic reevaluation. The company has reportedly decided to prioritize enhancing gaming performance on Windows 11, particularly for devices like the ASUS Project Kennan. This shift in focus means that while Microsoft has not completely abandoned its own handheld device plans, resources will now be directed toward third-party collaborations and optimizing Windows 11 for gaming.
According to sources, Project Kennan's hardware development is nearing completion. However, there is currently an intensified effort between Microsoft's Xbox and Windows teams to enhance the gaming experience through software improvements. This collaboration is aimed at ensuring a successful launch of the Xbox-branded ASUS device later this year.
Microsoft's decision to focus on providing robust infrastructure for Windows 11-powered third-party devices comes amid growing competition in the handheld gaming sector. Notably, in January, Valve announced its plans to extend SteamOS, which powers the Steam Deck, to third-party handheld gaming devices. This operating system is now available on various platforms, including the recently launched Lenovo Legion Go S.
Beyond its handheld gaming initiatives, Microsoft is actively working on the next-generation Xbox Series X/S successor. Xbox president Sarah Bond has previously stated that this upcoming console will represent the most substantial technical advancement seen in a hardware generation. Reports indicate that there are currently three prototype devices in development for Microsoft’s Gen-10 project. Additionally, the company is also exploring next-gen Xbox cloud systems aimed at reducing latency to levels comparable with NVIDIA’s GeForce Now service.
In summary, while Microsoft has temporarily sidelined its first-party handheld gaming device, its focus on third-party collaborations and improvements to Windows 11 gaming performance underscores its commitment to remaining competitive in the evolving gaming landscape.
