Microsoft Gaming CEO Phil Spencer told Polygon he couldn’t stop thinking about what an Xbox handheld could be. Months later, Spencer told Bloomberg Microsoft had indeed been thinking about it, but that it’s a piece of hardware that’s still years out from becoming a reality.

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.

A new report has outlined Microsoft’s video game hardware ambition, alleging a full next-gen Xbox is set for 2027 and an Xbox-branded gaming handheld is due out later in 2025. Windows Central reported on a partner PC gaming handheld codenamed Keenan,

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.

Earlier this week, it was reported that Microsoft was planning the release of an Xbox handheld that’s set to launch sometime in 2025, and it looks like that handheld is going to be manufactured by ASUS.