Earlier this week, we learned more about Microsoft's plans for an Xbox handheld. Rather than building a bespoke device itself, Microsoft is partnering up with an OEM to produce an Xbox-licensed handheld. While initially we didn't know which OEM Microsoft has teamed up with, that has now changed.

According to The Verge, Microsoft has opted to team up with ASUS for its Xbox-themed handheld. With that in mind, the device is expected to be similar to the currently available (and expensive) Asus ROG Ally. Microsoft previously revealed that it had been working with handheld makers like Lenovo and Asus to put together a version of Windows 11 more fit for gaming.

While we will see Xbox-licensed products like the upcoming Xbox handheld from Asus, Microsoft is still expected to be working on its own custom handheld in-house. Whether or not that product sees the light of day remains to be seen. Microsoft has cancelled multiple Xbox hardware projects in recent years, including the Xbox Keystone, a streaming device intended to turn any TV into an Xbox, with full access to Game Pass via Cloud Gaming.

Aside from upcoming handhelds, Microsoft is also currently working on its next-gen home console. The next Xbox is expected to arrive in 2027 and will be more ‘PC-like' and could end up featuring a SteamOS style setup with a gaming UI set as the default boot screen, with access to an advanced desktop view hidden away in the options somewhere.

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KitGuru Says: If the Asus Xbox handheld is indeed real, then I don't expect it to compete with the Steam Deck on price and at that point, I'm not sure there's much of a market left.

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