Asus Expected to Release Xbox Handheld in 2025, Collaborating with Microsoft to Integrate Windows and Xbox Libraries

Last year, Phil Spencer, the CEO of Microsoft Gaming, hinted that an Xbox-themed handheld gaming device wasn’t in the immediate future. However, this doesn’t mean that other manufacturers might not be developing one with Microsoft’s backing. Sources over at The Verge suggest that Microsoft is on a mission to merge Xbox and Windows into a unified platform, and Asus is a key partner in this ambitious project. On its end, Asus is diligently working on what they’ve codenamed Project Kennan. This exciting venture, aided by Microsoft’s strategic efforts, might even see the light of day this year.

While Asus handles the hardware, Microsoft is developing Project Bayside, a framework designed to standardize the Xbox user interface across various gadgets. This system, which is essentially Windows wrapped in an Xbox-themed skin, will run on the handheld that Asus is crafting. Together, Project Kennan and Bayside represent Microsoft’s aim to seamlessly blend the strengths of Xbox and Windows.

Jason Ronal, Microsoft’s VP overseeing Xbox gaming devices and ecosystems, commented to The Verge earlier this year about the company’s commitment to this integration, anticipating tangible results by the year’s end. Yet, despite the circulating rumors, we’re still waiting on official news from either Microsoft or Asus—no announcements or even teasers yet.

The launch of Valve’s Steam Deck in 2022 sparked a revival in handheld gaming consoles. Currently, Microsoft holds a competitive edge thanks to many top-tier PC gaming handhelds running on Windows 11. But change is on the horizon. Enter Lenovo with their Legion Go S, which features SteamOS, following the trend set by Valve. Right now, you can buy the Windows 11 version for $729, but come May, a more budget-friendly SteamOS variant will debut at just $499. Lenovo also plans to release a cheaper version of the Windows-based Legion Go S around the same time for $599, but that slight $100 savings might sway gamers towards the SteamOS model instead.

This shift likely didn’t escape Microsoft’s notice. Lenovo, one of its long-standing partners, is introducing a popular alternative OS—SteamOS—which could be concerning for Microsoft. Valve appears to be positioning SteamOS as a serious competitor to Windows, particularly in the handheld gaming market. Already grappling with PlayStation 5’s dominance in consoles, Microsoft will need to act swiftly if it wishes to keep Xbox and Windows as the go-to choices in handheld gaming territory.