Xbox hardware has faced an uncertain future ever since Microsoft adjusted its gaming strategy to launch first-party games on rival platforms in 2024. According to reports, the company’s console sales in the United States hit a record low in 2024. Despite Microsoft’s struggles as a platform owner, Xbox CEO Phil Spencer said the company remains focused on its hardware business. A new report strengthens his claims, detailing the company’s plans for gaming hardware. Microsoft is said to be preparing to launch a PC gaming handheld computer this year and plans to launch a successor to the Xbox Series S/X in 2027.
Xbox handheld console planned to launch in 2025
The information comes from Windows Central, which claims that Microsoft will be entering the gaming handheld space with partner devices scheduled to launch later this year. The report released on Monday also claims that the next-generation Xbox console is now in full production.
Microsoft is reportedly working with an original equipment manufacturer (OEM) on PC gaming for the Xbox handheld device. While the report doesn’t name a company partnering with the parent company of Xbox, it’s likely to be major PC manufacturers like Lenovo, Asus, and MSI. All three companies have their own Windows-based PC gaming handheld devices on the market, namely the Lenovo Legion Go, Asus ROG Ally and MSI Claw.
The Xbox gaming handheld is reportedly codenamed “Keenan” and its design is “undoubtedly” Xbox, with a dedicated Xbox guide button. Reports say the device is likely to be Windows-based, with a focus on the Microsoft Store and PC Game Pass ecosystem. The Windows operating system also allows users to install other game storefronts and launchers, such as Steam and Epic Games Store.
Considering that Windows-based handheld devices have been criticized for their software experience, it’s possible that the operating system will be customized for the handheld experience. Microsoft has previously said it intends to combine the Windows and Xbox experiences to simplify operating systems for gaming handheld devices.
Windows-based gaming handsets face criticism for their software and UI experience
The next generation of Xbox consoles in 2027
According to reports, in addition to plans to bring an Xbox-branded PC gaming handheld computer to the market in 2025, Microsoft is also developing a successor to the Xbox Series S/X consoles. The report quoted people familiar with the matter as saying that the next-generation console has been “fully approved.” The company plans to launch a successor to the high-end Xbox Series X in 2027, but it’s unclear whether the underpowered Xbox Series S will get the same treatment. Microsoft also plans to launch new controller options that support direct connections to the cloud, the report said.
In February 2024, Xbox President Sarah Bond reiterated Microsoft’s commitment to future Xbox hardware in a business update, claiming that the company was committed to achieving “the biggest technological leap forward” for the next generation of Xbox consoles.
While Microsoft is developing future Xbox hardware, questions have been raised about the platform’s viability after the company decided to launch its first-party games on rival platforms. Since Microsoft Gaming CEO Phil Spencer announced in February 2024 that some Xbox exclusive games would launch on PS5 and Nintendo Switch, more first-party games (both old and new) have launched outside of the Xbox and PC ecosystems.
Xbox Series X successor has been approved by Microsoft
Image source: Microsoft
Xbox games on other platforms
This year, popular Xbox exclusive games such as Forza Horizon 5, Age of Empires II: Definitive Edition, and Age of Mythology: Retelling have been released on PS5. Bethesda’s Indiana Jones and the Circle launches on Xbox Series S/X and PC in December, and is expected to arrive on Sony consoles in 2025. Doom: Dark Ages, a first-party game also from Bethesda, will launch simultaneously on PC, Xbox Series S/X, and PS5 on May 13.
Spencer has said on more than one occasion that he wouldn’t rule out the possibility of any Xbox-exclusive games coming to PlayStation. In an interview in January, the Xbox boss said Bethesda’s sci-fi RPG Starfield could also be released on PlayStation.
“I wouldn’t pick any particular game, and that goes back to my ‘red line’ answer, like there’s no reason for me to put a fence around any game and say ‘this game isn’t going to go to a place where it’s going to find players and it’s not going to be a commercial success for us,'” Spencer said.
“Game Pass is an important part of playing games on our platform. But taking games away from other platforms is not the way to go for us. It doesn’t work for what we’re doing now,” he added.
Last month, Spencer admitted in a separate interview that he was no longer trying to move players from other platforms to Xbox and was instead focusing on building the Xbox business there.
Microsoft launches ‘This is an Xbox’ ad campaign in November
Image source: Microsoft
Even with new Xbox hardware on the way, Microsoft itself has tried to downplay the “box” in “Xbox” and decouple its content offerings from the console. In November, the company launched a new “This is Xbox” marketing campaign that emphasizes its cloud and Game Pass strategies, essentially telling Xbox users they don’t need an Xbox console to play Xbox games. At its annual shareholder meeting a month later, Microsoft CEO Satya Nadella reiterated that message, saying players should be able to experience Xbox on all devices.
Although the number of Xbox players has increased, Xbox Series S/X sales still lag far behind PS5, and Microsoft is promoting a multi-platform future for Xbox games. The company sees the launch of first-party games on other platforms as an area of growth. Last year, Spencer spoke about the decision to release Xbox-exclusive games on PS5, saying the gaming division must run a business and be accountable to parent company Microsoft.
“It’s true within Microsoft – we have a high bar in terms of what we have to deliver back to the company because we have a level of support from the company that’s amazing for what we’re able to do.”