There’s no official confirmation yet, but well-known journalist Tom Warren from The Verge has reported that some “insiders” have confirmed that Microsoft has canceled its official Xbox portable console. Instead, the company has decided to adopt a different strategy regarding hardware production for this type of device.
This portable console, which was expected to be a next-gen handheld Xbox, has been the subject of rumors for some time. Some hints about it were even made by Phil Spencer, though Microsoft never officially announced anything.
Recently, it was revealed that the rumored portable console had been “paused” by Microsoft. The company focused on other solutions. However, Warren believes this ultimately led to the complete cancellation of the project.
A Change in Strategy
This doesn’t mean that Microsoft is stopping Xbox production. According to Warren, new Xbox consoles are still coming. But, the handheld console project has been shelved, and Microsoft is now pursuing a different approach.
This new strategy is already visible in the announcement made during the Xbox Games Showcase 2025, where the ASUS ROG Ally with Xbox branding was introduced. Essentially, Microsoft plans to rely on external manufacturers for portable devices while focusing on the development of its software platform.
The big challenge for Microsoft now is to fully unify the Xbox console environment with Windows PC. This is a natural step for the future but also a complex one, as ensuring complete compatibility with both current and past Xbox games is no small feat.
As Warren reported, this is a significant project. Sarah Bond has been working on this for some time, even creating a division focused on compatibility. The goal is to ensure that all Xbox games (original Xbox, Xbox 360, Xbox One, and Series X/S) can be played on PC, possibly through emulation.
Warren also mentioned, “I still think we’ll see next-gen Xbox hardware from Microsoft, but I also strongly believe we’ll see multiple devices from PC makers like Asus that will also be considered next-gen Xbox consoles.”
