Xbox hardware has been staring at an uncertain future since Microsoft pivoted its gaming strategy to launch first-party titles on rival platforms in 2024. Console sales in the US reportedly hit a record low for the company in 2024. Despite Microsoft’s struggles as a platform owner, Xbox chief Phil Spencer has said the company is still focussed on its hardware business. A new report has strengthened his claim, detailing the company’s gaming hardware plans. Microsoft is said to readying a PC gaming handheld for launch this year, with plans to bring the Xbox Series S/X successor in 2027.
Xbox Handheld Planned for 2025
The information comes from Windows Central, which claims Microsoft is set to enter the gaming handheld space with a partner device planned for launch later this year. The report, published Monday, also claims the next-generation Xbox consoles are now fully in production.
Microsoft is reportedly collaborating with an original equipment manufacturer (OEM) in the PC gaming space on the Xbox handheld device. While the report doesn’t mention the company working with the Xbox parent, it’s likely a major PC manufacturer like Lenovo, Asus and MSI. All three of these companies have their own Windows-based PC gaming handhelds in the market with Lenovo Legion Go, Asus ROG Ally and MSI Claw, respectively.
According to the report, the Xbox gaming handheld is codenamed “Keenan” and sports a design that’s “unmistakeably” Xbox, with a dedicated Xbox guide button. The device will most likely be Windows-based, with a focus on Microsoft store and PC Game Pass ecosystems, the report said. Windows OS would also allow users the install other game storefronts and launchers like Steam and Epic Games Store.
The OS will likely be tailored for a handheld experience, considering Windows-based handhelds have faced criticism over their software experience. Microsoft has previously said it intends to combine Windows and Xbox experience to streamline OS for gaming handhelds.
Windows-based gaming handhelds have faced criticism over their software and UI experience
Next-Gen Xbox Consoles in 2027
In addition to its plans of bringing an Xbox-branded PC gaming handheld to market in 2025, Microsoft is reportedly working on the successor to Xbox Series S/X consoles. The next-generation consoles have been “fully greenlit”, the report said, citing sources familiar with the matter. The company is planning to launch a successor to the higher-end Xbox Series X in 2027, but it’s unclear if the underpowered Xbox Series S will get the same treatment. Microsoft is also planning to introduce new controller options with support for direct-to-cloud connectivity, the report said.
In February 2024, Xbox president Sarah Bond had reiterated Microsoft’s commitment to future Xbox hardware in a business update, claiming the company was focussed on delivering “largest technical leap” for a new console generation for the next Xbox.
While Microsoft is developing future Xbox hardware, questions about the platform’s viability have been raised after the company decided to launch its first-party games on rival platforms. Since Microsoft Gaming CEO Phil Spencer announced in February 2024 that some Xbox exclusive games would be launching on PS5 and Nintendo Switch, more first-party titles — both old and new — have launched outside the Xbox and PC ecosystem.
The Xbox Series X successor has been greenlit at Microsoft
Photo Credit: Microsoft
Xbox Games on Other Platforms
This year, popular Xbox exclusives like Forza Horizon 5, Age of Empires 2: Definitive Edition and Age of Mythology: Retold have already been announced for PS5. Bethesda’s Indiana Jones and the Great Circle, which launched on Xbox Series S/X and PC in December, is set to arrive on Sony’s console in 2025. First-party title Doom: The Dark Ages, also from Bethesda, will launch simultaneously on PC, Xbox Series S/X and PS5 on May 13.
Spencer has said more than once that he would not rule out any Xbox exclusive game from making the jump to PlayStation. In an interview in January, the Xbox boss suggested that Starfield, Bethesda’s sci-fi RPG, could release on PlayStation, as well.
“There’s no specific game that I would — this kind of goes back to my ‘red line’ answer — like there’s no reason for me to put a ring fence around any game and say ‘this game will not go to a place where it will find players, where it will have business success for us’,” Spencer had said.
“Game Pass is an important component of playing the games on our platform. But to keep games off of other platforms, that’s not a path for us. It doesn’t work for us what we’re doing now,” he had added.
Last month, in a separate interview, Spencer admitted he was no longer trying to move players on other platforms to Xbox and was instead focussed on building the Xbox business there.
Microsoft’s “This is an Xbox” ad campaign launched in November
Photo Credit: Microsoft
Even as new Xbox hardware is on its way, Microsoft itself has sought to deemphasise the ‘box’ in the ‘Xbox’, decoupling its content offerings from its console. In November, the company ran a new “This is an Xbox” marketing campaign that highlighted its cloud and Game Pass strategies, essentially telling Xbox users that they didn’t need an Xbox console to play Xbox games. At an annual shareholders’ meeting a month later, Microsoft CEO Satya Nadella doubled down on the message, saying players should be able to experience Xbox on all their devices.
Microsoft’s push towards a multi-platform future for Xbox gaming has come as Xbox Series S/X sales have lagged far behind the PS5, even as Xbox player numbers are up. The company sees launching its first-party games on other platforms as an area of growth. Last year, Spencer had talked about the decision to release Xbox exclusives on PS5 and said the gaming division had to run a business and be accountable to its parent, Microsoft.
“It’s definitely true inside of Microsoft — the bar is high for us in terms of the delivery that we have to give back to the company, because we get a level of support from the company that’s just amazing in what we’re able to go do.”
