Microsoft Gaming CEO Phil Spencer warned in November that the mythical Xbox handheld is a few years away and only at the prototype stage right now. But if you read the headlines this week, you might think it’s actually arriving later this year.
A new report from Windows Central claims that “Xbox’s new hardware plans begin with a gaming handheld set for later this year, with full next-gen consoles targeting 2027” and that Microsoft is working on a “Project Keenan” handheld in partnership with an unnamed OEM. The report has generated plenty of headlines about an Xbox handheld arriving in 2025, but the reality is a little more complicated and related to Microsoft’s Xbox platform work to compete with SteamOS.
Sources familiar with Microsoft’s plans tell me the company’s Xbox platform plans for this year and beyond are centered on one big goal: the unification of Windows and Xbox. Jason Ronald, VP of Xbox gaming devices and ecosystem, revealed to The Verge in January that the company is combining “the best of Xbox and Windows together” and that we’d start to see changes later in 2025.
I understand the Xbox work that has hit the headlines this week is actually called Project Kennan, not Keenan. I’m told that Kennan is the codename for a handheld that is being manufactured by Asus, and it’s part of a larger effort from Microsoft to unify Windows and Xbox towards a universal library of Xbox and PC games.
I’m told that Asus is one of the launch partners for these efforts, with an Xbox-branded handheld likely to debut later this year. I say likely because a lot of this platform work is still ongoing, so until Microsoft officially announces it, timelines could change.
The device itself will be powered by Windows underneath but with an interface that more closely resembles what you’d find on an Xbox. I wouldn’t be surprised if Microsoft has some kind of certified hardware program here, so that only approved third-party devices can run “the best of Xbox and Windows.”
Some of this platform work is codenamed Project Bayside, part of an Xbox UX framework that is designed to ensure there’s a common Xbox UI across multiple devices to help combine Windows and Xbox. Together, Kennan and Bayside represent some of the work that Ronald was hinting at, opening up the benefits of Xbox to the broader Windows ecosystem.
Microsoft is also working on combining Windows and Xbox in a way where there’s a single store of games and an easier path for game developers to build titles that span across handhelds, console-like hardware, and PC gaming rigs.
The big question is whether all of these platform changes will unlock the ability to play Xbox games on these new handheld gaming PCs. Microsoft has a lot of experience running emulators to get original Xbox and Xbox 360 games working on the Xbox One and Xbox Series S / X, so if anyone can bring Xbox games to PC, it’s Microsoft.
Community efforts to get Xbox One games running on PC are making solid progress, with XWineOne and WinDurango both working on layers to translate Xbox API calls to Windows ones. It’s similar to some of the work Valve has done with Proton to get Windows games running on Linux.
Most of the community progress with Xbox One games running on PC has been thanks to a kernel exploit for Xbox One and Xbox Series consoles that was uncovered last year. This exploit, which was actually a flaw in Windows, was patched quickly by Microsoft, but it was too late to stop enthusiasts dumping Xbox One games to get a better understanding of how they’re different from their PC versions.
While we wait to see if the community can come up with a full solution to run Xbox games on Windows, it looks like Microsoft is working on something similar. Xbox president Sarah Bond created a new team focused on game preservation and forward compatibility in early 2024, which suggests that Microsoft is working through the licensing hurdles to somehow preserve existing Xbox digital libraries for this universal library of Xbox and PC games.
It’s reasonable to assume that these Xbox platform changes will shape the future of Xbox consoles, too. I wrote last month that “I don’t think Microsoft is embarking on such a big project without these handheld-focused platform changes being the foundation for whatever Xbox hardware comes next.”
Windows Central reports that Microsoft is working on a “premium successor” to the Xbox Series X alongside its own Xbox handheld that is tentatively slated for release in 2027. I’m fully expecting Microsoft’s next Xbox console to be a lot more PC-like, so the Kennan and Bayside projects will likely give us an early look at how the next-gen Xbox will take shape on the software side, at least.
These Xbox platform changes could also help fend off the threat of SteamOS. I wrote last year that Microsoft is now in a handheld gaming PC race, with Valve allowing device makers to offer SteamOS on their handhelds instead of Windows. Microsoft has been slow to respond to the Steam Deck, particularly around improving the Windows experience on handhelds like Asus’ ROG Ally. Valve opening up SteamOS last summer and then Lenovo introducing its own SteamOS-powered handheld in January will have sounded the alarms inside Microsoft, because if one Windows OEM has already been tempted by SteamOS then what’s stopping more of them from switching?
This is particularly relevant beyond the emerging market of handhelds, too. Valve is now in a far better position to make its console-like Steam Machines a reality, thanks to the success of the Steam Deck and its Proton work. If OEMs get comfortable with SteamOS on their handhelds, the next logical step is a demand for SteamOS on something more like a miniature PC or game console.
Microsoft is already struggling to compete with Sony’s PlayStation hardware sales, but if its next-gen Xbox platform is able to run on more PC-like hardware, it could compete a lot more closely. It would also make those “this is an Xbox” ads make a lot more sense.
There are a lot of ifs, buts, and maybes here. Ultimately, it’s the execution from Microsoft that will be important. I’ve already laid out how I think Microsoft can turn Windows PCs into an Xbox, and all that is left is to hear from Microsoft on exactly how it will merge the best bits of Windows and Xbox.
