Asus and Microsoft Collaborate to Launch Xbox Handheld in 2025, Aiming to ‘Unify’ Windows and Xbox Game Libraries

Last year, Phil Spencer, CEO of Microsoft Gaming, shared that an Xbox gaming handheld was still quite a few years down the road. Yet, that doesn’t mean other original equipment manufacturers (OEMs) aren’t working to make this happen with Microsoft’s blessing. According to insider information gathered by The Verge, Microsoft is pursuing a plan to bring Xbox and Windows together into a unified platform. Asus has emerged as a key partner, contributing to this ambitious initiative with its own device in the works, known internally as Project Kennan. This gaming handheld, set to potentially debut this year, is expected to greatly benefit from Microsoft’s integration efforts.

Asus is focusing on the hardware aspect, while Microsoft is developing something called Project Bayside. This initiative aims to create a consistent Xbox user interface across various devices. Essentially, it’s a Windows-based system enhanced with an Xbox-themed overlay, ideal for Asus’s upcoming handheld. With Kennan and Bayside, Microsoft seems dedicated to merging the strengths of Xbox and Windows in a seamless way.

Earlier this year, Jason Ronal, Vice President of Xbox gaming devices and ecosystem, mentioned to The Verge that the company is zeroed in on this integration project, anticipating tangible outcomes before the year is up. While the buzz around these developments is exciting, it’s worth noting that official announcements—or even teasers—from Microsoft or Asus have yet to surface.

Back in 2022, Valve reignited interest in handheld gaming consoles with its release of the Steam Deck. However, Microsoft currently holds an edge given that many top-tier PC gaming handhelds are powered by Windows 11. This landscape might soon shift, courtesy of Lenovo’s announcement of the Legion Go S, which runs on SteamOS. The Legion Go S comes with a price tag of $729 for the Windows 11 version, available now. Meanwhile, the SteamOS variant, launching in May, will be priced more attractively at $499. Lenovo is set to release a more budget-friendly Windows-powered model in the same timeframe, priced at $599, though the mere $100 saving may push some towards the SteamOS version instead.

This shift is likely catching Microsoft’s eye, especially as a long-time OEM partner is rolling out a competing OS in May. Valve’s move signals an increasing rivalry with Windows through its SteamOS. Already grappling with the PlayStation 5 in the console market, Microsoft likely wants to avoid Valve gaining ground in handheld gaming. To maintain their market position, Microsoft must ensure that Xbox and Windows remain the top choice for handheld gaming enthusiasts.