Asus Set to Release Xbox Handheld in 2025, Collaborating with Microsoft to ‘Integrate’ Windows and Xbox Libraries

Late last year, Phil Spencer, who heads Microsoft Gaming, remarked that we wouldn’t see an Xbox gaming handheld anytime soon. But just because Microsoft isn’t diving into this right now doesn’t mean other manufacturers aren’t stepping up. According to insiders at The Verge, Microsoft is on a mission to merge Xbox and Windows into a single powerhouse platform, and Asus is gearing up as a major player in this endeavor. Asus’s project, intriguingly named Project Kennan, hints at a gaming handheld that’s set to harness Microsoft’s ambitious plans, with whispers suggesting it might even hit the market this year.

While Asus is busy crafting the physical device, Microsoft is hard at work on Project Bayside. This initiative looks to harmonize the Xbox interface across multiple devices. Basically, it means the handheld Asus is working on will run a Windows-based OS with an Xbox-inspired look. The collaboration, linking “Kennan” and “Bayside,” underscores Microsoft’s vision to seamlessly combine the best features of Xbox and Windows.

Earlier this year, Jason Ronal, Microsoft’s VP overseeing Xbox gaming devices and their ecosystems, shared with The Verge that the integration is a major focus, with tangible results expected in the near future. Yet, despite our enthusiasm, there haven’t been any official breadcrumbs—no announcements or even a cheeky teaser—from either Microsoft or Asus.

The unveiling of the Steam Deck by Valve in 2022 breathed new life into handheld gaming consoles. Still, Microsoft holds an upper hand, with the majority of top-tier PC gaming handhelds currently running on Windows 11. However, Lenovo’s introduction of the Legion Go S, powered by SteamOS, could shake things up. The Windows 11 model is already out there for $729, but come May, a more budget-friendly SteamOS version will debut at $499. Lenovo also hinted at a cheaper Windows version arriving around the same period, priced at $599. But that $100 savings might see gamers opting for the SteamOS over its Windows cousin.

This shift is surely sitting on Microsoft’s radar, especially as longtime partners like Lenovo start backing alternative operating systems like SteamOS. With Valve aiming to rival Windows with its own ecosystem, Microsoft finds itself in a duel not just with Sony’s PlayStation 5 in the console realm, but now with Valve in the handheld arena. To maintain its stronghold, Microsoft needs to ensure Xbox and Windows continue to be the favored choices for handheld gaming enthusiasts.