Asus and Microsoft Reportedly Collaborating to Unveil Xbox Handheld in 2025, Aiming to Merge Windows and Xbox Game Libraries

Last year, Microsoft Gaming’s CEO, Phil Spencer, hinted that we shouldn’t expect an Xbox gaming handheld anytime soon. Yet, this doesn’t rule out the possibility of other manufacturers developing one with Microsoft’s blessing. Sources from The Verge reveal that Microsoft is aiming to blend Xbox and Windows into a unified platform, with Asus as one of its initial collaborators in this venture. Asus is reportedly working on a project dubbed “Project Kennan,” which could be a gaming handheld device poised to leverage Microsoft’s advancements and perhaps make its debut this year.

On the hardware front, Asus is undertaking significant initiatives, while Microsoft is focused on Project Bayside. This framework seeks to create a consistent Xbox user interface across various devices. Essentially, Bayside will drive the gaming handheld from Asus, merging the adaptability of Windows with an Xbox overlay. Projects Kennan and Bayside illustrate Microsoft’s intentions to merge the finest aspects of Xbox and Windows.

Jason Ronal, Microsoft’s Vice President in charge of Xbox gaming devices and ecosystem, indicated earlier this year to The Verge that this integration is their priority and we could see the results before the year ends. Despite these promising reports, neither Microsoft nor Asus has made an official statement or even dropped a teaser, keeping enthusiasts in suspense.

The Steam Deck’s release by Valve in 2022 breathed new life into handheld gaming consoles. In the meantime, Microsoft has been ahead in terms of options, since most top-ranking PC gaming handhelds run on Windows 11. However, Lenovo’s new Legion Go S powered by SteamOS might change the landscape. Currently available with Windows 11 for $729, Lenovo plans to introduce the SteamOS variant in May at a more appealing price of $499. Concurrently, they’re eyeing a cheaper version of the Windows-powered Legion Go S for $599, leading many gamers to contemplate a switch to SteamOS for the cost savings.

This shift in dynamics likely has Microsoft’s attention, particularly as an esteemed OEM partner embraces an alternative OS launching soon. It highlights that Valve, with its SteamOS, is prepared to challenge Windows. Already grappling with competition from the PlayStation 5 in the console market, Microsoft is unlikely to welcome another formidable contender in the handheld domain. To maintain its stronghold, Microsoft must act decisively to keep Xbox and Windows as the preferred operating systems in the handheld gaming ecosystem.