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Microsoft has temporarily shelved its Xbox handheld, but a third-party Windows 11 handheld is coming

Microsoft has hit the pause button on plans for its first-party handheld. However, it is still planning to launch a third-party Xbox handheld gaming console.

Windows Central's Jez Corden had recently revealed a device codenamed Project Kennan, which Microsoft has been working on along with ASUS. This handheld is expected to be the ROG Ally 2, or at least one version of the Ally 2 will have the Xbox branding. This device is expected to be announced later this year.

(Image courtesy: Windows Central)

Microsoft has decided to allocate its teams to improve Windows 11 gaming performance on handhelds made by third-parties. This is the reason why its own handheld has been sidelined. It is worth noting that Microsoft's Xbox handheld has not been canceled, it is just temporarily not being prioritized.

The first-gen ASUS ROG Ally runs on Windows 11, as did the Lenovo Legion Go. But the upcoming Microsoft console differs from these in that it was meant to run Xbox games natively. This could be a game changer, but it is also very ambitious, which might explain why Microsoft doesn't want to stretch its resources too thin. Microsoft is also said to be working on next-gen Xbox cloud systems, to compete with NVIDIA GeForce Now.

It will be interesting to see how this Windows 11 handheld will perform, especially considering that Valve has allowed OEMs to install SteamOS on non Steam Deck devices. In a recent video about the Lenovo Legion GO S, popular tech reviewer, Dave2D, had criticized Windows 11 as the cause of the problem for the handheld's performance problems, and noted that the performance and battery life of the console had improved drastically after installing Valve's Linux-based operating system.

And while we are on the topic of handhelds, the Nintendo Switch 2 releases on June 5.

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