In a recent revelation, Microsoft’s ambitious plans for its own Xbox handheld console appear to have been effectively abandoned. Initially, the tech giant had partnered with ASUS to create the ROG X Ally and ROG X Ally X, which were showcased at the Xbox Games Showcase 2025 and are set for a holiday release. This partnership was meant to fill the gap while Microsoft worked on a handheld of its own, designed to coincide with the release of its next-gen Xbox home console. However, according to The Verge’s Tom Warren, these plans may now be completely scrapped.
Warren reports that the focus is shifting towards refining the software platform instead of hardware development.
Microsoft’s shift in priorities doesn’t mean the end of their console ambitions. The company is still set to release a next-generation Xbox, but rather than working on it exclusively in-house, Warren suggests that OEM partners like ASUS may take the lead in developing these consoles. The ASUS-made handhelds are now seen as a kind of ‘market test’ for Microsoft’s broader vision of integrating Windows and Xbox across devices. With the goal of turning every screen into an Xbox, the handhelds are part of a bigger strategy to make Xbox more accessible across various platforms.
While hardware development is on the backburner, services like Xbox Cloud Gaming and Xbox Play Anywhere are already helping expand the Xbox ecosystem. Microsoft is also betting on future innovations such as emulation technology, which could help bridge the gap between various platforms. As for the long-term plans, Microsoft has promised that its next-gen console will be the ‘largest technical leap ever seen’ from one generation to the next, though many believe that only through advanced technologies like machine learning will this bold vision come to fruition. With a tentative 2027 release date, gamers will have to wait a while to see if these claims hold up.
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