Microsoft delays first-party Xbox handheld plans to focus on Windows 11 gaming
The company is still investing in handheld gaming, but it’s playing the long game.
For a while, it looked like Microsoft was charging ahead with its Xbox handheld. A true first-party portable console, fully capable of playing Xbox Series X|S games on the go, and an answer to the PlayStation Portal.
But now, Microsoft is putting that dream device—still in the works—on hold. Microsoft is not abandoning the project, but it is putting it on hold to concentrate on a more significant task in the future: optimizing Windows 11 for gaming.
The issue is that Windows 11 still struggles on portable devices at present. Performance inconsistencies, clunky touch support, and poor UI scaling have all been pain points for gamers using Windows-based handheld devices like the ROG Ally or Lenovo Legion Go.
Techloy
Compare that to the Steam Deck's SteamOS, Valve’s Linux-based system designed specifically for handheld gaming—it’s smoother, faster, and easier to use out of the box. Microsoft seems to know that dropping a new first-party Xbox handheld now, when its OS still has optimization issues on handhelds, would be setting the device up for instant criticism.
However, that doesn’t mean Microsoft is abandoning handhelds entirely. In fact, Project Keenan—a separate initiative involving a partnership with companies like Asus—is very much alive. It’s not an Xbox console in the traditional sense. Instead, it’s a Windows-based PC handheld with Xbox branding and integration.
Think of it as a Steam Deck alternative, but with Game Pass baked in and official Microsoft support behind the scenes. And with Microsoft's strategy of shifting focus to improving Windows 11 for gaming, Project Keenan will specifically benefit from it.
Oluwaseun Bamisile
In summary, Microsoft continues to invest in handheld gaming, but it is taking a strategic approach. Rather than rushing out a first-party Xbox handheld and risking a flop, it’s betting on building a better foundation first.
With Keenan on the way and Windows 11 getting smarter and more gamer-friendly, the pieces are falling into place. While the console may face a delay, the strategy remains unaffected.
