Summary
Microsoft’s upcomingXboxhandheld console is reportedly being put on hold as the company shifts its priorities to improving gaming performance on Windows 11 devices. Previously, the newXboxhandheld was reportedly planned to release in 2027, just two years after competing handhelds like the Nintendo Switch 2 debuted on the market.
Rumors about the new Xbox handheld have been circulating for a while, and in 2024,Phil Spencer confirmed that an Xbox handheld was in the works. Although Spencer didn’t reveal any specific details about the console, rumors continued to persist in 2025, with an ASUS-manufactured Xbox handheld being planned for release by the end of 2025. Xbox and ASUS' collaborative handheld should not be confused with Xbox’s own handheld, however. Xbox’s native handheld console, alongside the successor to the Xbox Series X, was reportedly planned to release in 2027, but it appears that plans for the new handheld have changed.
Microsoft still wants to build the upcoming Xbox handheld, but the project has been put on hold to focus on improving Windows 11 gaming performance, according to a report fromWindows Central. The company plans to optimize the operating system for devices like Project Kennan, which is the codename forXbox and ASUS' new handheld, as Microsoft’s priorities shift more toward third-party OEM handhelds. Despite the Xbox handheld being put on hold, Microsoft is still investing in developing its own gaming handheld in the future, and it’s reported that the hardware for the system is already finished and ready. However, there will be significant efforts between Microsoft’s Xbox and Windows teams to improve software like Xbox layers and apps on Windows 11.
Xbox Reportedly Puts Native Handheld on Hold and Shifts Focus to Improving Windows 11 Gaming Performance
It should be noted that there have not been any layoffs as a result of Microsoft’s repriortiziation, according to the report. Instead, resources are being allocated to the Xbox and Windows teams in order to work on partner projects like Project Kennan. Moreover, the release of the next-generation Xbox console to succeed the Xbox Series X is still planned for release in 2027, with its development continuing at “full pace.“Xbox is also reportedly planning to bring titles to Nintendo Switch 2, which launches on June 5 as Nintendo’s next-generation handheld.
Microsoft is working on next-gen Xbox cloud systems as well, and testing is underway at the Microsoft HQ in Redmond. The cloud platform could compete with NVIDIA’s GeForce Now service and offer ultra-low latency for gaming. Microsoft previously worked on Project Hobart, a canceled cloud-first mini console that was part ofMicrosoft’s cloud gaming strategy.
