For years, Xbox fans have speculated about Microsoft’s potential entry into the handheld gaming space. Now, it looks like the wait is nearly over. According to a report from Windows Central, Microsoft is teaming up with an undisclosed PC gaming manufacturer to create a new Xbox-branded handheld device, codenamed "Keenan." Expected to launch in late 2025, this device could mark a major shift in how Microsoft approaches portable gaming.

A PC-Focused Xbox Handheld

Unlike a traditional Xbox console, this new handheld won’t be a first-party device built entirely by Microsoft. Instead, it’s a partnership-driven effort that will feature Xbox branding while running on Windows. This means players can expect seamless integration with Xbox Game Pass, the Microsoft Store, and potentially even third-party storefronts like Steam and Epic Games.

Given that the device is positioned as a PC-first gaming handheld, it’s likely to be more in line with competitors such as the Steam Deck, Asus ROG Ally, and Lenovo Legion Go. If Microsoft successfully implements an optimized user interface, it could make the experience feel closer to a console rather than a traditional Windows machine.

Possible Features and Hardware

While specific details are still under wraps, here’s what we might see:

• Custom AMD Processors – Like the Steam Deck and other portable PCs, the Xbox handheld is expected to feature AMD hardware, ensuring solid gaming performance.
• Windows 11 Integration – Expect Xbox Game Bar and other Windows gaming tools to play a big role in the handheld’s ecosystem.
• Cloud Gaming Support – Microsoft’s focus on Xbox Cloud Gaming could make this a cloud-first device, allowing players to stream games without needing high-end local hardware.
• Xbox Play Anywhere Compatibility – Games purchased digitally could work across Xbox consoles, PCs, and this new handheld.
• Multiple Hardware Tiers? – Some reports suggest Microsoft could release different versions of the handheld, similar to the Xbox Series S and X approach.

When Can We Expect a Reveal?

Rumors suggest that Microsoft may officially announce the device as early as May or June, possibly during the Summer Games Fest. This would align with previous major Xbox announcements, where the company has historically unveiled new hardware and services.

Can Microsoft Compete with the Steam Deck?

Valve’s Steam Deck has dominated the handheld PC gaming market since its release, setting a high standard for both hardware and software integration. If Microsoft wants to compete, it needs to bring something fresh to the table. A custom Xbox-style interface, deep Game Pass integration, and an optimized Windows experience could be key differentiators.

The Future of Xbox Hardware

In addition to the handheld, reports indicate that Microsoft is planning a new Xbox console for 2027. It’s possible that a future iteration of the handheld could be more closely tied to the Xbox ecosystem, rather than being a PC-centric device.