Microsoft’s Xbox Handheld Console Development Halted

Microsoft’s plans for a handheld gaming console have reportedly been scrapped, just days after Asus launched its ROG Xbox Ally. The anticipated device was expected to rival the Nintendo Switch 2, but sources indicate that Microsoft will instead focus on enhancing its Xbox software platform. This shift will allow third-party manufacturers to create their own Xbox-branded handheld gaming devices, marking a significant change in the company’s strategy.

Shift in Strategy for Microsoft

According to a report from The Verge, insiders reveal that Microsoft has “essentially cancelled” its plans for a proprietary handheld gaming console. Instead of pursuing its own device, the tech giant will concentrate on refining its Xbox software, which has already been integrated into the newly released Asus ROG Xbox Ally and ROG Xbox Ally X. This decision aligns with Microsoft Gaming CEO Phil Spencer’s vision of fostering collaboration with third-party original equipment manufacturers (OEMs) interested in developing handheld gaming PCs that run on Windows.

Spencer emphasized the unprecedented level of cooperation between the gaming division and the Windows team during a recent Xbox podcast. This collaboration aims to create a seamless experience for users of new handheld consoles, which will operate on Windows but feature a customized Xbox-themed user interface. This interface will allow users to launch games and applications through a console-like launcher, similar to SteamOS, thereby addressing potential usability issues on smaller screens.

Focus on Windows Optimization

The cancellation of the Xbox handheld console comes shortly after Windows Central reported that Microsoft had paused its development efforts. The company is now prioritizing the optimization of gaming performance on Windows 11, ensuring that it operates efficiently on handheld devices. This strategic pivot aims to enhance the gaming experience for users who prefer portable gaming solutions.

In a notable shift in terminology, Microsoft has begun referring to new PC games as “Xbox PC” titles instead of simply labeling them as Windows compatible. This change reflects the company’s commitment to integrating its gaming ecosystem more closely with Windows. The Xbox PC app is also set to support Steam games alongside titles specifically designed for Xbox PCs, broadening the gaming options available to users.

Future of Xbox Gaming

Despite the cancellation of its handheld console, Microsoft is not stepping back from the gaming market. The company is actively working on solutions that will allow Xbox titles to be played on Xbox PCs using emulators. However, it appears that significant development is still needed before this becomes a reality.

As Microsoft shifts its focus towards collaboration with third-party manufacturers, the landscape of handheld gaming may see new entrants that leverage the Xbox brand. This strategy could lead to a diverse range of handheld devices that cater to various gaming preferences, ultimately enriching the gaming ecosystem. With the gaming industry evolving rapidly, Microsoft’s new direction may position it favorably in the competitive market of portable gaming.


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