Asus Reportedly Partnering with Microsoft for an Xbox Handheld Release in 2025 to Integrate Windows and Xbox Libraries

Late last year, Phil Spencer, the CEO of Microsoft Gaming, pointed out that an Xbox gaming handheld was still some years down the road. But that doesn’t mean other manufacturers aren’t busy exploring the idea with Microsoft’s blessing. According to insiders at The Verge, Microsoft aims to bring together Xbox and Windows into one seamless platform, and Asus is stepping up as a key partner in this project. Asus is developing what they call Project Kennan, a gaming handheld that could benefit from Microsoft’s integration efforts, and they might unveil it as soon as this year.

Asus is not just diving into hardware, though. Microsoft is crafting a unified user interface under Project Bayside, designed to bring the Xbox experience to various devices. It’s a system based on Windows but uniquely tailored with an Xbox aesthetic. Project Kennan and Project Bayside are central to Microsoft’s strategy of merging the Xbox and Windows ecosystems.

Earlier this year, The Verge spoke with Jason Ronal, Microsoft’s VP of Xbox gaming devices and ecosystem. He mentioned that Microsoft is intensely focused on this integration, hoping to showcase some results later this year. Yet, we’re still in the dark without any official word or teaser from Microsoft or Asus.

The Steam Deck launched by Valve in 2022 sparked renewed interest in handheld gaming consoles. Despite this, Microsoft currently has the upper hand, offering more choices as most of the top handheld PCs are fueled by Windows 11. However, things are shifting with Lenovo’s unveiling of the Legion Go S, powered by SteamOS. Presently, you can purchase the Windows 11 version for $729, while the SteamOS version, coming in May, will be a budget-friendly $499. Lenovo plans to offer a more affordable Windows-powered Legion Go S around the same time for $599, but the price gap might sway many gamers to opt for the SteamOS model instead.

This arena of development has likely caught Microsoft’s attention, especially with one of its reliable partners opting for a competitor’s operating system. This move indicates Valve’s bolder presence in the competition against Windows with its SteamOS. As Microsoft already grapples with stiff competition from the PlayStation 5 in the console market, allowing Valve’s SteamOS to gain a foothold in handheld gaming isn’t part of the plan. For Microsoft to maintain its dominance, it’ll need to ensure that Xbox and Windows remain the go-to choices for handheld gaming enthusiasts.