Attention fans of portable gaming: Microsoft has formally cancelled its long-rumoured Xbox portable gaming system. Microsoft has taken a different direction for its gaming future, putting aside the idea of a portable Xbox to compete with the Nintendo Switch and Valve's Steam Deck after months of conjecture.

What prompted Microsoft to change its mind?

What would lead Microsoft to give up on such a potential concept? The solution lies in the recently revealed ROG Xbox Ally and ROG Xbox Ally X handhelds, as well as the new collaboration with Asus. The company is currently concentrating on these products, which were unveiled during the Xbox Games Showcase on June 8, 2025. The ROG Xbox Ally X has received positive early reviews, particularly for its fluid performance and seamless integration with Xbox.

The plot thickens. According to a report by The Verge, Microsoft's own device—codenamed "Project Kennan"—was being developed, but the company chose to focus on software and leave the hardware to third-party makers like Asus. The ROG Xbox Ally operates on Windows but provides a unique full-screen Xbox interface, making it difficult to distinguish between PC and console. Sarah Bond, president of Xbox, encapsulated it during her address at the showcase: "For the first time, a player is going to be able to hold the power of the Xbox experience in their hand, and take it with them anywhere they want to go."

An integrated Xbox environment

This change is logical. Microsoft is wagering on a unified ecosystem—one in which the Xbox experience may be used on any device, not just hardware bearing the Xbox logo—rather than competing with partners and risking confusion among gamers. It is a step that might provide customers greater options and freedom, allowing them to play Xbox games anywhere they like, regardless of the storefront or app they use.

Certainly, not everyone is pleased. Some fans are disillusioned, pondering what a genuinely first-party Xbox handheld would have resembled and if it would have been cheaper or more creative than the Asus gadgets. However, it's worth noting that while partners like Asus push the hardware boundary, Microsoft may now concentrate on improving the Xbox software platform.

Thus, although the hope of a native Xbox portable is currently dashed, the Xbox gaming landscape seems more flexible and portable than ever. Only time (and gamers) will tell if this bet pays off.

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