Asus to Potentially Release Xbox Handheld in 2025, Collaborating with Microsoft on Unifying Windows and Xbox Libraries

Late last year, Phil Spencer, the CEO of Microsoft Gaming, hinted that an Xbox handheld console was still a long way off. But that hasn’t stopped other manufacturers from moving forward, seemingly with Microsoft’s blessing. Sources close to The Verge suggest Microsoft is currently in the process of merging Xbox and Windows into a seamless platform. As part of this initiative, Asus appears to be collaborating closely, developing what is internally known as Project Kennan—a gaming handheld likely influenced by Microsoft’s overarching strategy, possibly slated for release within the year.

Beyond the hardware, Microsoft is reportedly concentrating on Project Bayside, a framework designed to provide a unified Xbox interface across various devices. This operating system, adapted from Windows but customized with an Xbox-themed design, is expected to power the handheld that Asus has been working on. The combined efforts of Kennan and Bayside highlight Microsoft’s ambition to meld Xbox and Windows technologies effectively.

Jason Ronal, Vice President of Xbox gaming devices and ecosystem at Microsoft, shared with The Verge earlier this year that the company is heavily investing in this integration, hoping to see tangible outcomes by the end of the year. Despite the buzz, official announcements or even hints remain elusive from both companies.

The gaming industry was invigorated when Valve released the Steam Deck in 2022, sparking a resurgence in handheld consoles. While Microsoft currently holds an edge with a range of PC gaming handhelds operating on Windows 11, Lenovo’s recent announcement regarding its Legion Go S, running on SteamOS, could shift this dynamic. The Windows 11 version of Lenovo’s Legion Go S is available for $729, but its SteamOS counterpart, arriving in May, will be significantly cheaper at $499. Furthermore, Lenovo plans to introduce a more affordable Windows variant that same month for $599, though a $100 price saving might lure gamers towards the SteamOS model.

These developments have likely caught Microsoft’s eye, particularly since one of its major partners is set to introduce SteamOS as a compelling alternative this May. Valve’s maneuver suggests an emerging competition with Windows, which Microsoft might find concerning, given its ongoing battle with Sony’s PlayStation 5 in the console market. To avert losing ground to Valve and its SteamOS in the handheld arena, Microsoft is likely compelled to act, solidifying Xbox and Windows as leading choices for handheld gaming platforms.