Microsoft’s Xbox hardware plan is moving into a bold new phase, with an Xbox-branded gaming handheld console on the way for late 2025 and a complete next-gen console lineup due for a 2027 launch, according to an exclusive report from Windows Central.
The Xbox Series X|S generation has been a mixed bag for Microsoft. Though console sales have declined steadily quarter to quarter, the gaming arm of the company has witnessed a major increase in monthly active users with the cash-cow acquisition of Activision-Blizzard.
With heavy-hitting mobile hits such as Candy Crush Saga and Diablo Immortal, as well as franchise stalwarts such as Call of Duty and Overwatch, Microsoft’s future in gaming looks firm.
But doubts have persisted regarding the firm’s devotion to console hardware, particularly as it continues to port first-party exclusives such as Forza Horizon 5 to PlayStation.
Even with this cross-platform approach, Microsoft is still committed to its hardcore Xbox faithful, with far-reaching hardware aspirations now in motion. The company is working on an Xbox-named gaming handheld, codenamed “Keenan,” according to sources, with a well-known PC gaming OEM—almost certainly ASUS, Lenovo, MSI, or Razer—tagged as its partner.
Due out in late 2025, the product will have unmistakable Xbox flair, such as the signature Xbox guide button, and will be running a full version of Windows 11.
The handheld should give top priority to the Microsoft Store and PC Game Pass, with support for third-party platforms such as Steam. This positioning makes the device a hybrid between a gaming handheld and a portable PC, with a more streamlined experience than current OEM devices such as the ASUS ROG Ally or Lenovo Legion Go.
Microsoft is also said to be experimenting with new Windows 11 “device-aware” features, which will help minimize bloatware and enhance performance for controller-based gaming.
Outside of the handheld, Microsoft’s next-gen console ambitions are already underway. Insiders report that the next-generation successor to the Xbox Series X|S platform has gotten a green light from CEO Satya Nadella, with a next-gen premium console and new controller variants in its sights for a 2027 release.
These consoles are rumored to further close the loop between Xbox and Windows, streamlining game development by allowing developers to more easily bring PC titles over to Xbox.
Backward compatibility will be an anchor of the Xbox universe, with Xbox head Sarah Bond just announcing a dedicated team committed to maintaining generation-crossing compatibility. Furthermore, Xbox head Phil Spencer has indicated the possibility of supporting third-party storefronts such as the Epic Games Store, GOG, and even Steam on future Xbox devices.
Cloud gaming and AI also have expected important roles in Microsoft’s next-gen vision. The new controllers are said to come with direct-to-cloud connectivity, allowing for easy swapping of devices and an overall better gaming experience.
As Microsoft grows its gaming presence across platforms, these hardware efforts mark a return to a focus on innovation and an investment in bringing innovative experiences to Xbox enthusiasts. With a gaming handheld in development and next-generation consoles in the works, the future of Xbox hardware has never looked brighter.
