Microsoft has reportedly abandoned development of its own Xbox handheld device, according to The Verge’s Tom Warren. The tech journalist revealed the company has deprioritized this hardware initiative to concentrate on its next-generation Xbox software platform. While Microsoft may still release new Xbox hardware in the future, this decision indicates a strategic pivot toward expanding the ecosystem through third-party partnerships rather than first-party handheld development.
This shift coincides with Microsoft’s collaboration with Asus on two new gaming handhelds: the ROG Xbox Ally and ROG Xbox Ally X. These co-developed devices represent a key part of Microsoft’s revised hardware approach, blending Windows functionality with Xbox gaming experiences. Positioned as both market competitors and experimental platforms, the Ally series serves as a testing ground for Microsoft’s vision of seamless, cross-device gaming integration.
Microsoft’s long-term gaming strategy focuses on expanding Xbox accessibility across multiple platforms, according to Warren. The company aims to deliver gaming experiences through native play, Xbox Play Anywhere, and Xbox Cloud Gaming as part of its transition from a console-focused business to a comprehensive gaming ecosystem. A key component of this vision involves developing robust emulation for Windows PCs to support backward compatibility with legacy Xbox titles, though technical and licensing hurdles have temporarily limited this feature to cloud-based and Play Anywhere solutions.
This strategic shift materializes in the new Asus handheld lineup. Scheduled for a holiday 2025 release in select markets, both the ROG Xbox Ally and its enhanced counterpart, the ROG Xbox Ally X, run Windows 11 Home while incorporating Xbox-inspired interfaces. The premium Ally X model distinguishes itself with upgraded processing capabilities, expanded memory, and superior battery performance – all designed to bridge the gap between console gaming and PC portability.
Below is a comparison of the main specifications of both devices:
- Operating System: Windows 11 Home on both models.
- Input Features: Both feature contoured grips inspired by Xbox Wireless Controllers, complete with ABXY buttons, analog sticks, D-pads, and HD haptics. The Ally X includes impulse triggers for enhanced feedback.
- Processor: ROG Xbox Ally uses the AMD Ryzen Z2 A Processor, while the Ally X features the more powerful AMD Ryzen AI Z2 Extreme Processor.
- Memory: 16GB LPDDR5X-6400 on the Ally and 24GB LPDDR5X-8000 on the Ally X.
- Storage: 512GB SSD on the Ally, upgraded to 1TB on the Ally X.
- Display: Both devices offer a 7-inch Full HD IPS screen with 120Hz refresh rate, FreeSync Premium, and Gorilla Glass protection.
- Connectivity: The Ally X gains Thunderbolt 4 compatibility and slightly enhanced port configurations.
- Battery: The Ally comes with a 60Wh battery, while the Ally X features an upgraded 80Wh unit.
- Weight: The Ally weighs 670 grams, while the Ally X weighs 715 grams.
Microsoft’s decision to cancel its in-house handheld suggests a strategic shift toward relying on third-party partnerships to advance its portable gaming strategy. By collaborating with Asus, Microsoft can evaluate market demand and collect valuable user feedback without diverting resources to first-party hardware development.
While Microsoft hasn’t completely abandoned the possibility of a future Xbox-branded handheld, analysts anticipate the company will maintain its current focus on software ecosystem expansion, cloud gaming innovation, and cross-platform play initiatives.
Asus plans to reveal additional details—including pricing, accessories, and pre-order information—for both the ROG Xbox Ally and ROG Xbox Ally X as their late 2025 launch approaches.
