Microsoft is reportedly prepping a handheld Xbox for later this year with new consoles coming in 2027

Microsoft is prepping a new handheld version of its Xbox console that could be launched later this year. Meanwhile, plans are afoot to replace the existing Xbox Series S and X consoles in 2027.

If you’re wondering how Microsoft could be launching a handheld Xbox so soon, well, according to Windows Central the device is being produced in cooperation with a “PC gaming OEM (think ASUS, Lenovo, MSI, Razer, etc).” Reportedly, it will run Windows but make the Microsoft Store and PC Game Pass central features.

All of that suggests this device could be closely related to a handheld PC that’s already available, something akin to but no necessarily the Asus ROG Ally X or Lenovo Legion Go. There’s no mention of custom silicon, so the hot favourite for the device is probably AMD’s Strix Point APU in some form.

Windows Central claims the device, codenamed “Keenan” is something of a research project for Microsoft as opposed to being intended as a major money spinner in its own right. It’s all part of Microsoft’s plans to expand the Xbox ecosystem away from being tied to a narrow and specific console platform.

All of this makes it sound like this new Xbox handheld might be little more than a rebadge of an existing PC handheld from one of the big brands in terms of the hardware. So, the real innovation would be a tweaked version of Windows with tools for controlling aspects like power consumption and fan speeds, plus better support for and integration of console-style control inputs, and hopefully an interface overhaul to better support touch input on a small-ish screen.

Overall, it feels somewhat akin to Valve’s plans to offer SteamOS on partner devices, with the Lenovo Legion Go S due out in May being the first third-party handheld to offer Valve’s OS. SteamOS, of course, has thus far been exclusive to Valve’s own Steam Deck handheld. You might, therefore, call it a glorified Game Pass device.

If that’s the new handheld covered off, what about trad’ Xbox consoles? Windows Central says new versions of those have also been signed off by Micrsoft CEO Satya Nadella. Reportedly, that includes a new high-end console to replace the current Xbox Series X that’s due out in 2027.

In terms of hardware specs, no details are provided, though given time frame you might expect the graphics hardware to be based on AMD’s upcoming UDNA architecture, which will follow the latest RDNA 4 technology that’s just been launched in the hot new Radeon RX 9070 and 9070 XT GPUs.

However, it’s thought the new consoles will be closer than ever to the PC in hardware and software terms, reducing the work needed from game developers to port titles between PC and console. Backwards compatibility with legacy Xbox consoles is also said to be in the mix.

Anywho, it will certainly be interesting to see what Microsoft comes up with. The handheld gaming PC market has been a nice little niche up until now, but hasn’t really taken off. Will that change with an Xbox-branded device?

The fact that the Steam Deck still dominates the handheld market suggests that having a truly handheld-optimised OS makes a difference. So, if Microsoft can do a good job with optimising Windows for this Xbox device, it could help the wider handheld market really take off. Watch this space.