An Xbox handheld console is reportedly in the works, but it’s looking like it won’t be from Microsoft itself. Instead, Asus is tipped to be in collaboration to deliver a handheld later in 2025.
As reported by The Verge‘s Tom Warren, Microsoft is planning to develop an Xbox platform and device to rival Steam Deck, with Asus set to manufacture a new gaming handheld, codenamed “Project Kennan” (not “Project Keenan,” as previously reported).
Part of a bigger plan
Apparently, this is part of a large-scale plan to combine “the best of Xbox and Windows together,” as Jason Ronald, VP of Xbox gaming devices, told Warren. This means the console could arrive with a new operating system that makes it easy to play Xbox and PC games — presumably along with Xbox Game Pass cloud gaming.
The platform, being referred to as “Project Bayside,” and will act as a single user interface to access a catalog of games, including on the rumored handheld, a console and on a user’s PC. This isn’t a far cry from Valve’s SteamOS, which is now coming to other handhelds, like the upcoming Lenovo Legion Go S model.
Interestingly, the report also points out that Asus will be one of the launch partners, indicating that this is only the start.
As previously reported, Windows Central’s Jez Corden stated the gaming handheld “will look unmistakably ‘Xbox,'” despite Asus tipped to be manufacturing the device. That means an Xbox guide button and more.
Think of it like a third-party controller like the Backbone One making a PlayStation-focused controller for smartphones (which does exist).
With it being tipped to arrive in the second half of 2025 (along with a new Xbox console coming in 2027), details are scarce. However, considering Asus’ success with its gaming handhelds, Steam Deck may have a new, major competitor to deal with.
An Xbox-focused Asus ROG Ally?
The Asus ROG Ally, along with its premium sibling, the Asus ROG Ally X, stand among the best handheld gaming consoles you can get, so Microsoft would do well to partner up with the company for a new handheld device — especially if it comes with an all-new OS platform that caters to Xbox.
We’ve seen how SteamOS on the ROG Ally X offers offers improved performance and battery life compared to the usual Windows 11 OS on these handhelds, and the recent Lenovo Legion Go S with Windows suffered from this, too. It’s clear Windows 11 doesn’t agree with gaming handhelds, but a new platform that’s a “unification of Windows and Xbox”? That may be just the ticket.
There’s no word of a Steam Deck 2 being in the works (for now), but if we’re to see an Xbox-focused handheld later this year, Valve’s Steam Deck may see some tough competition. Well, it already will with the Nintendo Switch 2 possibly arriving as soon as April.
It seems Asus has its fingers in many pots, as an Xbox gaming handheld isn’t the only device it appears to be working on. There’s an Asus ROG VR headset set to be coming down the line, too, and it may be the first other than a Meta Quest headset to arrive with Meta Horizon OS.
