Summary
- Microsoft is a big player in the gaming space, despite the failings of its Xbox console. A handheld could easily dominate the market if the company nails the basics.
- A competitive price bracket, solid performance, good battery life, and software that can match Valve’s SteamOS Game Mode would set the Xbox handheld up for success.
- The Xbox handheld could dominate the market alongside the Steam Deck, but also represent the next step in Microsoft’s evolving gaming strategy.
It’s all but confirmed that Microsoft is working on an Xbox-branded PC gaming handheld. I don’t know about you, but I’m pretty excited about this. If Microsoft pulls off the right moves, the Xbox handheld could become, along with the Steam Deck, the most sought-after PC gaming handheld.
Microsoft and Valve Could Dominate the Handheld Market
At the moment, the Steam Deck is the undisputed ruler of the PC gaming handheld realm. According to IDC, a major market research firm, and the Verge, PC gaming handhelds have shipped about 6 million units in the last four years, including an estimate for 2025.
Out of those 6 million units, the Steam Deck accounts for about 3.7 million between 2022 and 2024, with Valve’s handheld console surpassing the 4 million mark if we include the 2025 estimate. These aren’t impressive numbers when viewed in a vacuum, but considering the nascency of the market, things aren’t that bad, and they can only get better from 2025 onwards.
From left to right: Lenovo Legion Go, AYANEO 2021 Pro, Valve Steam Deck, GPD Win3, Logitech G Cloud, Asus ROG Ally, OneXPlayer 1
We’ve gotten new handheld-specific chips, the first third-party SteamOS device in the form of the Lenovo Legion Go S SteamOS Edition, and a bunch of fresh competitors, such as the new MSI Claw and always interesting offerings from Chinese brands such as AYANEO and GPD, are joining the fray. If Microsoft plays its cards right, its Xbox-branded PC handheld could join the Steam Deck as a dominant force in the market.
For this to happen, a few things need to come to pass. Firstly, the price. If you ask me, the Xbox-branded PC handheld (from now on, I’ll just call it the Xbox PC handheld) has to cost $600 or less to be able to shake up the PC handheld market.
The 512GB Steam Deck OLED sells for $549, and if Microsoft can price its PC handheld in that ballpark, the company might have a winner. Other PC gaming handhelds, especially newer models, have seen price increases across the board, so if Microsoft can pull this off and combine it with capable enough hardware, I can see it taking a massive bite of not only Steam Deck’s cake but also ROG Ally’s and the rest of the Windows gang.
Steam Deck OLED
Elevate your gaming experience with the Steam Deck OLED. Immerse yourself in stunning visuals on the vibrant OLED display, while enjoying powerful performance and portability.
Aside from the price, the Xbox PC handheld needs beefy hardware capable of running modern triple-A games, especially those published by Microsoft Game Studios. Xbox has always been about raw power, so I expect the handheld to offer at least Z2 Extreme-like gaming performance and at least 24GB of memory.
Besides, if you embellish the device with Xbox branding, you have to be aware that prospective buyers will expect the device to be capable of running the latest and greatest Xbox games. I hope Microsoft doesn’t mess this up and stuffs the handheld with performant innards.
We’ve also got battery life, a stumbling block for many PC gaming handhelds. If the device has a battery life of at least two, two and a half hours at max power, it will challenge the Steam Deck in the department where Valve’s console is trumping every Windows handheld except for the ASUS ROG Ally X.
ASUS ROG Ally X (2024)
The ASUS ROG Ally X (2024) is a handheld gaming PC designed to take your favorite titles on-the-go. With the AMD Z1 Extreme processor and 24GB of RAM, you’ll find that the ROG Ally X packs a punch in the power department. It’s capable of playing games like Call of Duty: Black Ops 6 at over 100 FPS using recommended settings. USB4 and USB-C allow the ROG Ally X to be converted to a desktop through a USB dock, making it even more versatile.
Attractive pricing and great performance aren’t enough to warrant success in the current PC gaming handheld market. You also have to deliver the goods in the software department, and Microsoft might have a trick up its sleeve here in the form of a controller-friendly Windows UI.
If the Redmond giant manages to pull off the price, performance, and software trifecta, the Xbox PC handheld might end up being the most popular Windows handheld out there and, alongside the Steam Deck, the ruler of the realm.
Microsoft Could Debut a Controller-Friendly Windows UI
We already know that Microsoft has been working on redesigning the Windows UI to make it work better with controllers. So far, the results have been disappointing. The Xbox app’s handheld mode doesn’t work great; in fact, I prefer the regular mode over the handheld one. Aside from that and some updates to the Xbox Game Bar, we haven’t got any new reveals detailing how this redesigned UI might look or work. Personally, I wouldn’t mind a Metro UI-like interface, which could work great with controllers.
I don’t know about you, but being confident enough to launch an Xbox-branded Windows PC handheld tells me that Microsoft is cooking something and that the dish’s nearly done. Why else would the company release a Windows handheld, especially because Windows is touted as one of the weakest points of the entire Windows handheld experience?
The Xbox Windows handheld could be the first device to feature the new controller-friendly Windows UI, made from the ground up to play nice with face buttons and analog sticks. Using Windows on a daily basis on a handheld can be a pain, and an interface optimized for controllers that offers a similar level of console-like, frictionless usability to SteamOS’s Game Mode would be a godsend.
If the handheld offers an experience similar to that of SteamOS’s Game Mode, along with bringing the usual advantages you’re getting with a Windows handheld—wide game compatibility, PC Game Pass, a straightforward way to use third-party game launchers, competitive price, and capable hardware—I’d be very tempted to get one.
An Xbox Handheld Could Ease Us Into Microsoft’s New Strategy
Now, releasing a Windows PC gaming handheld is great and all, but I doubt Microsoft has decided to develop one out of the blue. I think that the Xbox PC handheld will be a trial run for Microsoft’s overhauled, “everything’s an Xbox” gaming strategy.
It’s obvious Microsoft has been moving away from the old-fashioned “exclusive games played on the box under the TV” approach for some time. First, we got Xbox games on PC, then Xbox Game Pass, which was also made available on PC.
Then the company pushed Game Pass to every device via cloud streaming, and nowadays, we’re seeing the death of the Xbox console exclusive with major Xbox Game Studios titles being released on the PlayStation 5. Xbox is just a brand nowadays, and the next-gen Xbox “console” might further entrench this approach.
Previous rumors had stated that the next Xbox console would be less akin to your regular, under-the-TV gaming box and closer to a PC. It would be compatible with third-party launchers such as Steam, but still feature an interface optimized for controllers, run Xbox games including backward-compatible titles, while offering a console-like gaming experience that doesn’t include messing around with settings for an hour before you can start playing the game proper. If you think about it, it looks like Microsoft is trying to create its own Steam Machine, only bearing the Xbox banner.
Now, a substantial shift in strategy like this should be properly tested before you actually pull off the move, something Microsoft is painfully aware of after the E3 2013 Xbox One reveal disaster, which triggered the Xbox downfall. I don’t think the company will attempt another substantial shift in its gaming strategy without testing the waters (but it’s Microsoft, so anything’s possible), and this is where the Xbox PC handheld comes in.
I believe the next Xbox console will run a modified version of Windows 11, with an interface optimized for controllers, the same interface that will debut on the Xbox PC handheld. Don’t forget that, aside from the next-gen under-the-TV Xbox, Microsoft is also preparing a handheld Xbox console, with the upcoming Xbox-branded PC handheld being a perfect test bed for the new Windows 11 controller interface, but also for new hardware and software.
Even if Microsoft had opted for off-the-shelf hardware for the Xbox PC handheld, such as the AMD Z2 Extreme, it might still receive valuable information regarding just how performant hardware you can put inside a handheld without going bonkers on power requirements and destroying battery life.
On the other hand, if the Xbox PC handheld uses a custom chip designed by Microsoft alongside partners such as AMD, Intel, or Qualcomm, it will be a perfect trial run for the hardware, a successor of which will, in a few years, end up in the handheld Xbox console.
Not only that, but the Xbox PC handheld could also introduce a next-gen upscaler that would certainly be a major part of the upcoming Xbox console family, whether a refined version of Auto SR or something completely new. Lastly, we might also see a version of Quick Resume finally landing on Windows 11, further bridging the feature gap between the Steam Deck and Windows gaming handhelds.
Whatever the case, I have high hopes for Microsoft’s first venture into the PC gaming handheld space. I hope that the device will sport an attractive price and performance in line with the high-end Windows handhelds of 2025.
Add a consolized Windows 11 interface that might be exclusive to the Xbox PC handheld for a while before landing on other Windows handhelds, and the Xbox PC handheld might turn out to be the biggest deal in handheld PC gaming in 2025.
