Microsoft Sets Sights on Handheld Console Market with Xbox-Branded Device, Set to Compete with Nintendo Switch 2

As the gaming industry anticipates the next evolution of portable hardware, the spotlight has typically centered on Nintendo’s highly anticipated Switch 2.

However, industry giant Microsoft is reportedly preparing its own entry into the handheld gaming market, poised to challenge Nintendo’s long-standing dominance in the space. According to a report from Windows Central, Microsoft is actively developing an Xbox-branded handheld gaming console, targeting a release window in 2025.

Codenamed “Keenan,” this device is said to be engineered in partnership with an undisclosed PC gaming OEM, ensuring that the new console will reflect the signature Xbox design and familiar controls that fans have come to expect.

While official images and detailed specifications have yet to be revealed, sources close to the project indicate that the device will stand out as undeniably 'Xbox' in both appearance and function. In addition to the collaborative handheld, Windows Central states that Microsoft is also working internally on a second portable device.

This yet-unnamed console is being developed entirely in-house and is reportedly slated for a 2027 release, rolling out alongside a new generation "Premium" successor to the Xbox Series X/S.

According to the report, production for this next-generation console has been given the green light at the highest levels within Microsoft, with CEO Satya Nadella fully backing the initiative. The move into handheld hardware represents a significant shift in strategy for Microsoft, which has traditionally focused on home consoles and PC gaming.

Xbox head Phil Spencer has previously expressed interest in exploring portable gaming as part of the company’s broader vision.

This approach reflects Microsoft’s commitment to expanding the Xbox ecosystem and delivering new ways for gamers to experience their library on the go. While the specifics regarding hardware and software integrations are still under wraps, Microsoft’s ambition to compete with Nintendo—especially with the Nintendo Switch 2 on the horizon—signals an increasingly competitive landscape in the handheld gaming market.

Microsoft’s collaboration with a major PC gaming OEM also hints at potential innovation in hardware design, perhaps blending console and PC gaming experiences for players worldwide. As of now, neither Microsoft nor its development partners have issued official statements or product teases.

Nonetheless, these reported projects highlight a growing industry trend: major console manufacturers are investing in powerful, versatile handheld devices that can deliver quality gaming experiences on the move. With the Nintendo Switch 2 expected to set new hardware benchmarks, Microsoft’s upcoming Xbox handheld could help redefine what gamers expect from portable platforms and further ignite competition among the industry’s leading players. Further updates will be provided as more verified details emerge from Microsoft and its collaborators.

Nintendo Switch 2 Nintendo Switch Nintendo Switch 2 Microsoft Xbox Switch Windows Central Satya Nadella Phil Spencer