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.

The Asus ROG Ally, along with its premium sibling, the Asus ROG Ally X, stand among the best handheld gaming consoles you can get, so Microsoft would do well to partner up with the company for a new handheld device — especially if it comes with an all-new OS platform that caters to Xbox.

From a purely logical standpoint, Asus as a hardware partner makes a lot of sense given it already has the ROG Ally, which is a fairly robust Windows 11 handheld PC that can run games in the Xbox Game Pass PC catalog both natively and via cloud-powered streaming.

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.

According to Windows Central ’s Jez Corden, Microsoft is working with an unspecified PC gaming manufacturer on an “Xbox-branded gaming handheld.” Corden’s sources claim that this unannounced device, code-named “Keenan,” could arrive sometime in the back half of 2025.

If this second handheld system happens, we'd expect it to be more like a 'traditional' Xbox console that supports console games. If the above 2025 system launches and Microsoft continues to work on compatibility for a few years, the team could potentially get existing Xbox console games running on this new device.

Those rumors about Microsoft making it own Xbox handheld may have been hasty, but we could see the Xbox version of SteamOS instead.

ASUSs upcoming Xbox handheld gaming console will run on Windows but will feature a more user-friendly Xbox interface to enhance the gaming experience.

Microsoft reportedly plans to release the next Xbox console in 2027. That's according to Windows Central, which claims that sources have indicated that the "internal successor" has been "fully greenlit all the way up to CEO Satya Nadella" and is now "fully in production".

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.