Xbox’s Long-Awaited Handheld Console Reportedly in Development

Rumors are heating up in the gaming world as Microsoft is reportedly developing its own handheld Xbox console, aiming to challenge the dominance of the Nintendo Switch and Steam Deck in the portable gaming market. According to sources familiar with the matter, prototypes of the new device are already in internal testing, and early impressions are promising.

This marks a significant shift for Microsoft, which has historically focused on home consoles and cloud gaming via its Xbox Game Pass service. While xCloud has allowed users to stream Xbox games to mobile devices, a dedicated handheld console would be the company’s first foray into portable hardware, signaling a new strategy to meet gamers where they are—on the go.

Insiders suggest the handheld will run a modified version of the Xbox OS and have Xbox Game Pass integration at its core. Unlike cloud-only solutions, the device is expected to support offline play, thanks to onboard storage and local hardware powerful enough to natively run popular Xbox titles. While full tech specs remain under wraps, performance is expected to rival devices like the ROG Ally and Lenovo Legion Go.

Microsoft Gaming CEO Phil Spencer has previously hinted at his admiration for the handheld form factor, telling fans during a 2023 AMA that “the future of gaming needs to be flexible—mobile, accessible, and powerful.” The company has also ramped up its hardware R&D spending over the past year, further hinting at something big on the horizon.

The handheld market is currently one of the most competitive and rapidly growing segments in gaming. Nintendo largely wrote the playbook with the Switch, and Valve’s Steam Deck pushed the boundaries of what portable gaming can be. Microsoft’s entry could not only diversify its ecosystem but also amplify the value of an Xbox Game Pass subscription by giving users yet another device to engage with.

If the rumors hold true, expect more news to surface this summer—with a possible reveal at Xbox’s annual showcase in June. For now, Xbox fans have one more reason to be excited about the future.