From a purely logical standpoint, Asus as a hardware partner makes a lot of sense given it already has the ROG Ally, which is a fairly robust Windows 11 handheld PC that can run games in the Xbox Game Pass PC catalog both natively and via cloud-powered streaming.

I understand the Xbox work that has hit the headlines this week is actually called Project Kennan, not Keenan. I’m told that Kennan is the codename for a handheld that is being manufactured by Asus, and it’s part of a larger effort from Microsoft to unify Windows and Xbox towards a universal library of Xbox and PC games.

Microsoft's upcoming Xbox handheld will reportedly be made by Asus, and it aims to take on Steam Deck by delivering a new OS to bring "the best of Xbox and Windows."

Those rumors about Microsoft making it own Xbox handheld may have been hasty, but we could see the Xbox version of SteamOS instead.

Sources say that Asus and Microsoft are working together to build the first Xbox handheld gaming console for launch later this year.

The outlet says in its report that the 2025 Xbox handheld is being created in partnership with ASUS (known for the ROG Ally series of handhelds) and will be powered by Windows - but with an interface that more closely resembles an Xbox.

Microsoft reportedly has plans set in motion to release its next Xbox in 2027. Along with the new console, there might be another handheld with this one being a proper Xbox handheld. What might happen is that the handheld is a lower-powered console, like the Xbox Series S, and the new home console will be more like the Xbox Series X.

Following reports earlier this week about Microsoft’s entry into the handheld gaming market, fresh details have emerged confirming that the first Xbox-branded handheld will, in fact, be manufactured by Asus.

I play most of my games on an Xbox plugged into a 65-inch OLED TV in the living room. Despite this comfy setup, I caved and finally bought a Steam Deck in late 2024, and I’m so happy that I’ve started padding my neglected Steam library once again.

A handheld device with the Xbox name might be releasing this year, but it just doesn't sound like something with the power to shake up the market.