Valve’s Steam Deck may finally face some real competition soon, as a new report suggests that Microsoft will reveal its first handheld Xbox this year. According to Windows Central, Microsoft is teaming up with a gaming PC manufacturer on an Xbox-branded gaming handheld codenamed “Keenan” that will feature familiar Xbox design hallmarks.
The report is relatively sparse on details but asserts that the handheld will likely run a full version of Windows, with the Microsoft Store and PC Game Pass taking center stage. Users should also be able to install Steam, the Epic Games Launcher, and other PC gaming apps.
One of the many reasons the Steam Deck is still the PC gaming handheld to beat is SteamOS. The Linux-based operating system was custom-built for controllers, which makes it significantly easier to navigate than competitors from Lenovo and Asus.
Windows Central expects the console to take advantage of the widgets on the Xbox Game Bar to let users control the TDP and fan speed. That said, it’s still unclear how much work Microsoft is doing to customize its OS for handheld gaming devices.
For now, the plan is to release “Keenan” before the end of 2025. That would put the handheld in direct competition with the Steam Deck as well as the Nintendo Switch 2.
Beyond the partner handheld, the report also says that Microsoft’s successor to the Xbox Series X/S has been greenlit by CEO Satya Nadella. The next-gen console and an Xbox handheld built by Microsoft are both scheduled to arrive in 2027.
“It seems that the next-gen Xbox consoles will be closer to Windows than ever before, reducing the amount of work developers have to commit to when porting from PC,” says Windows Central’s Jez Corden. “I understand that they will continue to sport backwards compatibility with legacy Xbox games too, however.”
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