Asus Allegedly Collaborating with Microsoft for 2025 Xbox Handheld Launch to Integrate Windows and Xbox Games

Last year, Phil Spencer, the head of Microsoft Gaming, hinted that we wouldn’t see an Xbox gaming handheld for some time. However, this hasn’t stopped other manufacturers from exploring the idea with Microsoft’s blessing. It looks like Asus might be one of these partners, as rumors suggest they are collaborating with Microsoft to bring a gaming handheld to market, potentially as early as this year. This effort ties into Microsoft’s goal to merge Xbox and Windows into a more unified platform, with Asus’s Project Kennan in the spotlight as a promising development.

While Asus tackles the hardware, Microsoft is not sitting idle on the software front. They are crafting Project Bayside, an initiative aimed at harmonizing the Xbox user interface across devices. Essentially, the handheld Asus is working on will operate on a Windows foundation while sporting an Xbox-esque look and feel. Such projects are part and parcel of Microsoft’s strategy to blend Xbox and Windows technology seamlessly.

Earlier this year, Jason Ronal, Microsoft’s VP of Xbox gaming devices and ecosystem, spoke to The Verge about the company’s focus on this integration, expressing optimism for tangible results by year’s end. Yet, despite the excitement, there’s been no official word or even a teaser from either Microsoft or Asus confirming these rumors.

The advent of Valve’s Steam Deck last year sparked a renewed interest in handheld gaming consoles. In this arena, Microsoft enjoys an edge, as many leading PC gaming handhelds are already powered by Windows 11. However, Lenovo’s upcoming Legion Go S could shift the balance. Initially available for $729 with Windows 11, a SteamOS version is slated for a May release at a modest $499, posing a potential challenge to Microsoft’s standing. Nonetheless, Lenovo plans to release a slightly cheaper Windows variant around the same time, priced at $599, though the more affordable SteamOS option might lure many gamers away.

This shift could be a wake-up call for Microsoft, particularly as a key partner introduces a strong competitor to Windows 11. Meanwhile, Valve’s SteamOS is positioning itself as a worthy rival. Given the ongoing competition with PlayStation 5 in the console world, Microsoft is unlikely to sit back and watch Valve gain ground in handheld gaming. To maintain their dominance, they’ll need to ensure Xbox and Windows remain go-to platforms for gamers globally.