Microsoft has reportedly delayed the development of its in-house Xbox handheld console as the company redirects its focus toward enhancing gaming performance on Windows 11 devices. According to a report from Windows Central, while the hardware for the new Xbox handheld is said to be complete, the project has been temporarily shelved in favor of software optimization efforts.
Originally slated for a 2027 release, the Xbox handheld was expected to launch a few years after competitors like the anticipated Nintendo Switch 2. Xbox chief Phil Spencer confirmed in 2024 that a handheld device was in development, though no specifics were shared at the time. Throughout 2025, speculation around the project continued, including reports of a separate ASUS-manufactured handheld being developed in collaboration with Xbox for a late 2025 launch.
That device, codenamed Project Kennan, represents a shift in Microsoft's strategy. Rather than launching its own standalone handheld console right away, the company appears to be prioritizing third-party OEM handhelds that run Windows 11. Microsoft is now focusing on refining Windows for portable gaming systems, optimizing features such as the Xbox app and interface layers to improve the handheld gaming experience on the platform.
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While Microsoft remains committed to eventually releasing its own dedicated Xbox handheld, it’s clear that the immediate goal is to ensure a seamless and competitive software ecosystem for the wave of Windows-based handhelds already on the market.
"Microsoft still wants to build the upcoming Xbox handheld, but the project has been put on hold to focus on improving Windows 11 gaming performance," Windows Central reported.
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