While recent years have seen the company shift towards cloud gaming and software integration, new reports suggest that Microsoft is not abandoning hardware.
Instead, it is preparing to launch its first-ever portable Xbox in 2025 while simultaneously setting the stage for the next-generation Xbox console, expected to debut in 2027. Clearly, this is also a war declaration to Nintendo Switch 2.
Xbox’s Changing Strategy
Microsoft’s approach to gaming has undergone a significant shift in recent years. The sales performance of the Xbox Series X and Series S has struggled to match even the underwhelming numbers of the Xbox One, pushing the company to rethink its strategy. Rather than relying solely on traditional hardware sales, Microsoft has embraced a more flexible approach, making Xbox experiences available across multiple devices, including rival platforms.
Despite speculation that Microsoft might exit the console hardware market altogether, new reports indicate otherwise. Windows Central’s Jez Corden recently released an exclusive report detailing Microsoft’s ongoing hardware projects, including the long-rumored Xbox handheld console.
The First Xbox Portable is Coming in 2025
Rumors about a portable Xbox have circulated for months, and now, sources close to Microsoft confirm that a handheld console is indeed in the works, with a launch planned for 2025. However, rather than being a fully in-house project, Microsoft is reportedly collaborating with an OEM partner. While the specific manufacturer remains unknown, potential partners could include ASUS, Lenovo, MSI, or Razer.
The key differentiator for Microsoft’s handheld console, codenamed “Keenan,” will be its software. The device is expected to run a customized version of Windows 11, optimized for controller-based navigation and gaming. Unlike existing handheld gaming PCs, Keenan will integrate Xbox Game Bar functionalities directly into the system, eliminating the need for third-party management software.
Microsoft aims to position Keenan as a natural extension of the Xbox ecosystem, providing seamless compatibility with the company’s game library and cloud gaming services while maintaining an open platform for third-party store integrations.
Next-Gen Xbox Expected in 2027
In addition to the portable Xbox, Corden’s report confirms that Microsoft has officially greenlit the development of its next-generation console, targeting a release in 2027. While details remain scarce, the decision to proceed with new hardware has been approved at all levels, including Microsoft CEO Satya Nadella.
The next-gen Xbox is expected to emphasize deeper integration between Windows and console gaming. One key feature reportedly under consideration is a controller with direct cloud connectivity, similar to Google Stadia’s cloud-based controller. This would enable smoother transitions between devices, reinforcing Microsoft’s commitment to a unified gaming experience.
Backward compatibility will also be a focal point, ensuring that players retain access to their digital libraries across multiple Xbox generations. Additionally, Microsoft aims to enhance the synergy between PC and console gaming, making it easier for developers to port titles between platforms.
Microsoft’s Continued Commitment to Hardware
Despite its growing emphasis on cloud gaming and software accessibility, Microsoft remains committed to producing gaming hardware. The introduction of the Xbox portable and the development of a next-generation console reaffirm the company’s dedication to providing flagship devices that anchor its gaming ecosystem.
