Asus Expected to Release Xbox Handheld in 2025, Collaborating with Microsoft to Merge Windows and Xbox Libraries

Last year, Microsoft’s Gaming CEO, Phil Spencer, suggested that an Xbox gaming handheld was still some time away. However, that doesn’t rule out other manufacturers stepping in with Microsoft’s blessing. According to sources at The Verge, Microsoft is aiming to merge Xbox and Windows into a unified platform, and Asus is on board as a launch partner. In particular, Asus is working on what they’re calling Project Kennan, a gaming handheld that could hit the market this year, leveraging Microsoft’s ongoing integration efforts.

While Asus handles the hardware development, Microsoft is focusing on Project Bayside. This initiative aims to standardize the Xbox user interface across various devices. The idea is for this to be compatible with the upcoming Asus handheld. Project Bayside essentially utilizes Windows, but with a distinct Xbox interface, further merging the Xbox and Windows experience.

Earlier this year, Jason Ronal, Microsoft’s VP of Xbox gaming devices and ecosystem, shared with The Verge that the company is zeroing in on this integration and anticipates seeing progress within the year. Even so, we’re still waiting on any official confirmation or teaser from either Microsoft or Asus.

When Valve debuted the Steam Deck in 2022, it sparked renewed interest in handheld gaming consoles. At the moment, Microsoft holds a slight edge because the top PC gaming handhelds run on Windows 11. However, Lenovo’s announcement about the Legion Go S, powered by SteamOS, could shift the landscape. Although the Windows 11 version of the Legion Go S is currently available for $729, the cheaper SteamOS option expected in May is priced at just $499. Lenovo also plans to release a budget-friendly Windows version for $599 around the same time, but the $100 price gap could push gamers towards the SteamOS model.

This shift likely has Microsoft on alert, especially with a significant OEM partner branching out with a popular OS alternative in May. It signifies Valve’s growing competition with Windows through SteamOS. As Microsoft already faces challenges competing with the PlayStation 5 in the console market, allowing Valve’s SteamOS to gain traction in handheld devices is not an option. To maintain its market position, Microsoft needs to secure Xbox and Windows as the go-to platform for handheld gaming.