Xbox reportedly launching PC gaming handheld to compete with Steam Deck this year, plus new console in 2027

If you’ve been holding off on picking up a Steam Deck, Asus ROG Ally, or any other PC gaming handheld, then maybe just wait a little bit longer.

Microsoft’s Xbox is poised to enter into the PC gaming handheld race later this year with a “partner device” of its own, according to a new report by Windows Central. The device is internally codenamed “Keenan” for some reason, and is set to come out in 2025 if all goes well.

According to the report, Microsoft is partnering with an original equipment manufacturer to build the PC handheld fully equipped with Xbox branding, with a mock-up of the image shown above. It will be “unmistakably” Xbox just by looking at it, the report said.

While Steam Deck runs on Valve’s SteamOS, “Keenan” will be like other Windows devices, according to the report, which states the handheld will “most likely run full Windows, putting the Microsoft Store and PC Game Pass front and center, alongside the ability to install things like Steam.”

Windows Central also stated that its sources “indicate that Microsoft’s internal successor to the Xbox Series X|S platform has been fully greenlit all the way up to CEO Satya Nadella, meaning that the next Xbox console is currently slated to launch in 2027, alongside “several” new controller options, meaning that this generation of console hardware is swiftly coming to an end over the next few years.

This generation for Xbox was odd, with Microsoft fully embracing multiplatform functionality, including sending several of its former exclusives to PS5 like Forza Horizon 5, Sea of Thieves, and Indiana Jones and The Great Circle. That thought process will continue into the future, according to the report.

“Xbox’s multi-device future revolves around meeting players exactly where they are, regardless of device, geography, or play style,” the report said. “Its acquisition of Activision-Blizzard accelerated that vision, anchoring Microsoft as a gaming company for the foreseeable future. Microsoft’s slate of upcoming Xbox games is stronger than ever, and the possibilities for integrations between Game Pass, Battle.net, cloud, and Microsoft’s mobile games also offer tantalizing potential.”

If the handheld is truly in the works and on the way, then we should know more some time this summer as the gaming industry steps out from the shadows to reveal what it’s working on at events like Summer Game Fest.