Microsoft has decided to step back from creating their own Xbox branded handheld device to focus on fixing Windows 11’s poor performance on existing portable gaming systems.
Windows Central broke this story exclusively, revealing that Microsoft’s dedicated Xbox handheld, which could have arrived in 2027 alongside the next Xbox console is no longer their primary focus. The project isn’t completely dead, but it’s not being actively developed right now. Multiple internal codenames existed for this device, though no team members lost their jobs due to this change in direction.
Partnership Device Still Coming
Microsoft hasn’t abandoned the handheld space entirely. They’re still working with ASUS on a third-party device called “Project Kennan” that should launch this year. This machine will likely use AMD’s powerful Z2 Extreme processor and come with a much-improved Windows 11 interface designed specifically for controller-based navigation.
The current Windows 11 experience on handhelds like the Lenovo Legion Go and ASUS ROG Ally has been frustrating for users. The operating system simply wasn’t built for these types of devices, creating a clunky user experience that many gamers dislike.
Competition Heats Up
Meanwhile, Valve’s SteamOS is expanding beyond the Steam Deck. The Lenovo Legion Go S became the first non-Valve handheld to ship with SteamOS this week, giving users a smoother gaming experience right out of the box. This move puts pressure on Microsoft to deliver better Windows 11 optimization for portable gaming systems.
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