Speculation has circulated that Xbox might partner with ASUS to release an external gaming device this year, followed by a proprietary model originally planned for 2027. However, recent updates suggest the latter project has been postponed.

Insider reports from Windows Central reveal Microsoft is reallocating resources to optimize third-party partnerships rather than pursue an internal handheld initiative. Key details from the disclosure include:

“Microsoft still wants to build its own Xbox handheld in the future, but Microsoft has decided to prioritize its teams to improve Windows 11 gaming performance, specifically for devices like the ASUS partner device ‘Project Kennan’.”

“Our sources have indicated to us that Microsoft is still deeply investing in developing its own Xbox gaming handheld technology in the future…”

Analysts note that while an official Xbox portable isn’t off the table, its 2027 target seems unrealistic. The shelved device reportedly aimed to support native Xbox titles rather than relying solely on PC adaptations. Current efforts focus on refining the user experience for ASUS’s upcoming hardware, described as nearing finalization despite ongoing software adjustments.

Further updates are anticipated as development progresses, though enthusiasts may need to wait longer for Microsoft’s direct entry into the handheld market.