We've heard numerous rumors about Microsoft working on an Xbox handheld gaming console to compete with the Steam Deck and the Nintendo Switch 2. The console is said to be a native Xbox handheld, but a new report suggests that Microsoft is shelving it to focus on other priorities.
According to a report by Windows Central, Microsoft has decided to halt development on the handheld, which was rumored to launch in 2027. This isn't the handheld codenamed "Kennan," as that's still on track.
The one being put on the shelf is a native Xbox device, more akin to the Nintendo Switch 2 than a Steam Deck or Windows handheld. It was designed to run full Xbox games like a traditional console.
What else is Microsoft doing?
According to the report, Microsoft has three console prototypes in development for its next-generation gaming platforms. The handheld would have been the fourth potential device.
It's important to note that this is just temporary. Microsoft still has handheld gaming on its radar. Part of that focus is shifted to improving Windows 11's handheld gaming performance, but it's also about releasing its handheld console at some point.
"Microsoft is still deeply investing in developing its own Xbox gaming handheld technology in the future," reads the Windows Central report.
The company is also focused on cloud gaming. The report states that the company is now testing next-generation Xbox cloud systems at its headquarters, which is exciting for those with fast enough internet to take advantage of the cloud's processing power.
Perhaps Microsoft plans to see how the Asus Kennan device does before it dips its toe more aggressively into the space. Rather than risking its resources, Microsoft can utilize its partnership with Asus to gauge whether gamers are ready for a handheld with Xbox branding attached.
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