Rumors about Microsoft's handheld consoles have been circulating for months. One project, Project Kennan, produced by ASUS, is scheduled for release later this year. Another project is Microsoft's own handheld console, scheduled for 2027. However, according to insider Jez Corden of Windows Central, this idea has been abandoned for now.
Project Kennan, whose photos recently appeared online, is still in the works. The hardware is already complete, and Kennan will likely be one of the first devices to receive the AMD Z2 Extreme processor.
Microsoft's own development, which does not yet have a working name, is taking a back seat as the company prioritizes the development of Windows 11 for the portable form factor. This is especially true for using the operating system on devices like Project Kennan. Such changes may be due to competition from SteamOS, which shows better performance and longer battery life.
"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,"" Corden says.
According to a recent report, Microsoft's own console could run full-fledged Xbox games, and the company still has big ambitions for such a device, but priorities have changed for now.
Microsoft is also working on the next-generation Xbox cloud gaming system, which is reportedly already being tested internally at its Redmond headquarters. This system should reduce latency to the level of NVIDIA GeForce Now, which is currently the market leader. Incidentally, GeForce Now is also now natively available on Steam Deck.
In addition to this, Microsoft continues to work on the next generation of the Xbox console, the release of which is supposedly scheduled for 2027. As previously reported, it will not look like traditional consoles, will have a compact form factor and will support any type of peripheral.