Microsoft Pulls Plug on Xbox Handheld—Gaming’s Latest ’Strategic Pivot’

Redmond’s rumored handheld dream is DOA—another casualty in the console wars’ hardware arms race. Insiders whisper about ’shifting priorities’ (read: cost-cutting) as Xbox doubles down on software. Meanwhile, Sony’s probably popping champagne—their PlayStation Portal just lost its biggest potential rival.

Funny how these tech giants keep ’exploring new markets’ until shareholders check the R&D receipts. Maybe they’ll pivot to blockchain gaming next—those NFT margins look juicy until you actually have to ship a product.

Microsoft says it wants to focus on Windows 11 gaming performance 

Microsoft has paused plans for a first-party Xbox handheld, originally set for 2027, to focus on enhancing Windows 11 gaming performance.

The shift comes as third-party devices gain traction, like Asus’ upcoming Kennan.

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— playswave 🎮 🌊 (@playswave_com) May 30, 2025

Phil Spencer, the head of Xbox, first revealed an Xbox portable device back in 2017. Spencer revealed the firm had “roughly designed” a portable gaming device in the past. The CEO has repeatedly talked about the handheld in recent years, fueling speculations that the handheld gaming device project had been revived. 

Jason Ronald, the VP of Next Generation at Microsoft, said in January that the firm was planning to combine Windows and Xbox experiences. Ronald added that the combination of the two would FORM a PC gaming handheld. 

In March, Microsoft said it would release Kennan while working on its internally developed portable gaming device. The tech company revealed it intended to release its own handheld device alongside an Xbox Series X/S replacement in 2027. 

Microsoft has allegedly revealed that it would focus its teams to work on improving the gaming performance of Windows 11. The tech firm stated the improvements would be implemented for specific devices, such as the ASUS partner gadget Project Kennan. 

Microsoft has confirmed it has essentially finished the hardware part of the device. The Redmond-based firm clarified that Xbox and Windows teams still had some improvements to make on the software side. 

Microsoft joins other firms launching handheld devices 

Microsoft’s MOVE to refocus on improving the performance of Windows 11-powered gadgets followed similar decisions other tech firms took. In January, Valve said it was working on bringing SteamOS to power the Steam Deck to third-party portable gaming devices. The firm later announced the operating system was available on a variety of portable devices, including the recently launched Lenovo Legion Go S. 

Nintendo first launched the Nintendo console in 2017, but has recently revealed an upcoming release. Japanese gaming firm Nintendo announced the Nintendo Switch 2 at the beginning of this year. The company said the handheld would be able to connect gamers in new ways. The firm also stated that the device would provide gamers with new ways to experience their games. Nintendo revealed that the Nintendo Switch 2 would be launching on June 5, 2025. 

The gaming firm said the device would have Joy-Con 2 controllers, which gamers could use as a mouse in any of the compatible games. The Japanese gaming firm added that the controllers would snap to the systems using magnetic connectors. The company also revealed the device would have powerful processing speeds that would deliver visuals via the gadget’s big screen. 

Nintendo revealed that gamers would connect with their friends to play Nintendo Switch 2 games via the new device.  Shuntaro Furukawa, the President of Nintendo, said the device would improve gaming experiences at home because gamers could use it on the go. The president stated that its new features would significantly expand the possibilities of gaming experiences. 

Furukawa said the upcoming device would be a leap forward in the firm’s journey of bringing joy to everyone who would use it. 

Sony launched the portable PlayStation Portal in 2023. The firm said the PS Portal would allow gamers to stream games from PS5 over the internet. Sony revealed that the handheld featured built-in controllers. The company stated that the controllers would support haptic feedback and adaptive triggers, which were aimed at replicating the tactile sensations experienced while gaming on PS5. Sony said the device would have a dedicated media section on the home screen, which would mirror the interface of the PS5.

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