Rumor mill: Microsoft has long hinted at a handheld gaming device without providing specific details. While the company continues to refine the software experience for Windows gaming handhelds (to an extent), reports conflict on when an official Xbox device might be released. Looking further ahead, speculation persists about whether Microsoft’s next console will even follow the traditional console model.

Windows Central claims to have heard from sources that Microsoft plans to launch its long-teased handheld device before the end of 2025, likely as a reference device for Windows-based handheld gaming PCs. However other publications dispute this claim, stating that an Xbox-branded handheld is not expected to arrive this year.

Rumor is Microsoft is collaborating with a third-party manufacturer to develop a handheld device codenamed “Keenan,” which will run Windows – similar to the Asus ROG Ally or Lenovo Legion Go. However, unlike those devices, it will feature an Xbox guide button and incorporate Microsoft’s console design language.

This handheld would likely mark the introduction of Microsoft’s planned updates to the Windows gaming UI to better support handheld gaming PCs.

Although devices like the ROG Ally, Legion Go, and MSI Claw are technically more powerful than Valve’s Steam Deck, the latter remains significantly more popular – likely due to its more polished UX and console-style operating system. While Windows handheld users struggle with a UI not designed for controllers or small screens, the Steam Deck boots into a compact, user-friendly interface while still retaining the flexibility of a PC.

Microsoft has repeatedly acknowledged the need for improvement in this area. At CES, the company vaguely outlined its goal of merging elements of Windows and Xbox to address these issues sometime this year. Responding to Windows Central’s report, Tom Warren stated that Keenan is simply a broader initiative for PC gaming handhelds in collaboration with OEMs, not a dedicated Xbox-branded handheld.

I’ve seen the report about Microsoft’s Project Keenan, and just to be clear there is no first-party “Xbox handheld” arriving in 2025. Keenan is part of PC gaming handheld work with OEMs, like Microsoft’s VP of Next Gen told us at CES www.theverge.com/2025/1/7/243…

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– Tom Warren (@tomwarren.co.uk) March 10, 2025 at 5:09 PM

The Xbox rumor mill doesn’t stop there, but reportedly Microsoft has fully approved a next-generation Xbox console planned for release in 2027.

The device, which Xbox head Phil Spencer previously boasted would provide the biggest technical leap in the company’s history, will behave more like a PC than any prior console. It will support backwards compatibility, and developers will require less work to port games between PC and Xbox.

Taken together with the plans Microsoft described at CES and Spencer’s past comments about bringing alternate storefronts to Xbox, reports about a more PC-like next-generation console raise the question of whether it will be a console at all. If the next Xbox is essentially a full-fledged Windows-based system, it could signal a complete shift in Microsoft’s approach to the video game industry.