Microsoft has reportedly shifted its strategy regarding the development of a first-party Xbox handheld console, stepping back from earlier plans to release a device around 2027—potentially alongside the next-generation Xbox. While Xbox head Phil Spencer previously noted that such a handheld was still years away, new information from Windows Central suggests a change in direction.
Instead of focusing on an in-house handheld, Microsoft is now prioritizing enhanced gaming performance on Windows 11 for third-party devices. The company is actively collaborating with partners like Asus on an Xbox-branded handheld, codenamed Project Kennan. According to internal communications, the focus has moved "more deeply towards third-party OEM handhelds in the interim."
Recent leaks revealed images of Asus' upcoming device, believed to be the ROG Ally 2, in both white and black variants. These photos surfaced via the Indonesian certification office and were briefly linked to a listing on the U.S. FCC website before being taken down. Windows Central reports that the hardware design is "essentially finished" and expected to be among the first devices powered by the AMD Z2 Extreme processor.
While full specifications remain unclear, and it's unknown if there are functional differences between the two color variants, sources indicate the units are currently undergoing open testing at Microsoft’s headquarters.
Last month, Asus Republic of Gamers teased the collaboration on X (formerly Twitter), sharing a glimpse of both an ROG Xbox controller and the handheld system. The official Xbox account responded with a playful wide-eyed GIF, fueling anticipation for an upcoming official announcement.
Meanwhile, development of the successor to the Xbox Series X is reportedly in full swing, with a planned release in two years. This aligns with comments from Xbox president Sarah Bond, who stated that Microsoft is "moving full speed ahead on our next generation hardware," aiming to deliver "the biggest technological leap ever in a generation."
