Tech Desk 
Jun 14, 2025
In a heartbreaking development for Xbox enthusiasts, Microsoft's long-rumoured Xbox handheld gaming console, whose launch was expected in the next couple of years, has reportedly been cancelled.
Xbox handheld gaming console's official fall from the cards comes shortly following Asus's recent launch of the ROG Xbox Ally. This means that Microsoft may have abandoned its ambitions to bring a direct competitor to the Nintendo Switch 2.
While scrapping plans for what grabbed headlines even before making a cut in its portfolio, Microsoft has reportedly directed its focus towards a new Xbox software platform that will allow third-party OEMs to design their own Xbox-branded handheld consoles.
Citing sources familiar with the matter, The Verge reported that Microsoft has "essentially cancelled" its plans for a proprietary handheld device.
Xbox handheld gaming console launch dropped: What's next?
Rather than venturing out to develop its own compact gaming console, the tech titan is focusing on enhancing its Xbox software, which has already debuted on the recently launched Asus ROG Xbox Ally and ROG Xbox Ally X.
Phil Spencer, CEO of Microsoft Gaming, said the collaboration with third-party OEMs to launch handheld gaming PCs running Windows has never been done before.
"This is the tightest collaboration I've seen between the gaming organisation and the Windows team in my three decades at the company," he remarked.
Although the new Asus handheld consoles are running on Windows, there's a catch for users: they lack the traditional Windows UI.
On the contrary, new Asus handheld consoles will utilise an Xbox-themed interface offering a console-like experience, similar to SteamOS.
