Microsoft Postpones Xbox Handheld Launch to Prioritise Enhancements for Windows 11 on Portable Devices

New insights reveal Microsoft is shelving its own Xbox-branded handheld console to concentrate on refining Windows 11's performance for third-party gaming devices. Asus's upcoming 'Kennan' handheld is set to benefit from this enhanced optimisation, signalling Microsoft's preference for collaboration over direct hardware competition, according to reports from Windows Central.

This development comes as SteamOS gains traction on Windows 11-compatible handhelds, challenging traditional gaming ecosystems. Devices such as Lenovo's Legion Go S, offering dual compatibility with SteamOS and Windows 11, highlight gamers' appetite for flexible platforms, even if it means sacrificing perks like Microsoft's Game Pass. Microsoft's strategic retreat suggests a shift towards embracing this evolving handheld gaming landscape rather than going it alone.

Microsoft Partners With Asus for 'Project Kennan'

Microsoft initially pursued both an in-house Xbox handheld and a third-party device with Asus. Now, attention seems to be shifting firmly towards the Asus collaboration, known as "Project Kennan," which, according to Windows Central, is edging closer to release with its hardware "essentially finished" and a launch still expected later this year. This signals a clear strategic focus on partnering rather than going it alone in the handheld market.

Microsoft's own first-party handheld, designed to deliver a true Xbox console experience capable of running full Xbox titles, now appears to have been sidelined—at least for the foreseeable future. This development marks a notable shift in the company's approach to portable gaming hardware.

Meanwhile, Windows 11 remains the go-to operating system for many handheld devices, but the rise of SteamOS is beginning to disrupt the status quo. Devices like the Lenovo Legion Go S and Asus ROG Ally offer users the flexibility to switch between Windows 11 and SteamOS, with the latter often praised for superior performance, while Windows 11 holds the advantage of broader ecosystem compatibility.

Microsoft Follows Industry Shift Towards Handheld Gaming Devices

Microsoft's renewed focus on enhancing Windows 11 performance for handheld gaming devices aligns with a broader industry trend. Earlier this year, Valve announced plans to expand SteamOS support beyond its own Steam Deck, making the operating system available on a growing range of third-party portable devices, including the recently released Lenovo Legion Go S.

Meanwhile, Nintendo continues to innovate in the handheld market. The company unveiled the much-anticipated Nintendo Switch 2 earlier this year, promising fresh ways to connect and engage gamers. Set for release on 5 June 2025, the new Switch aims to build on the success of its predecessor with enhanced features and gameplay experiences.

Nintendo has offered further insight into what players can expect from the upcoming Switch 2, with notable enhancements to its hardware and user experience. The device will feature redesigned Joy-Con 2 controllers that double as a mouse in compatible titles, attaching magnetically to the console for a sleeker, more integrated feel. Under the hood, Nintendo promises significant processing upgrades, with visuals optimised for the console's larger display.

Connectivity is also central to Nintendo's vision, with an emphasis on multiplayer features allowing users to engage with friends through the new platform. President Shuntaro Furukawa described the Switch 2 as a meaningful step forward, enabling seamless transitions between home and handheld gaming. He added that the console's innovation would help "expand the possibilities of play," underlining Nintendo's commitment to delivering joyful experiences to a global audience.