Microsoft Cancels Xbox Handheld Project Amid Market Concerns
Microsoft has reportedly canceled plans for a dedicated Xbox handheld console, opting instead to collaborate with partners like ASUS on devices such as the ROG Xbox Ally.
Microsoft has reportedly canceled plans to develop a dedicated Xbox handheld console, opting instead to collaborate with partners like ASUS on devices such as the ROG Xbox Ally.
According to industry insiders, the decision was influenced by market analysis indicating that existing handheld gaming devices have not achieved significant sales figures. For instance, Valve's Steam Deck has sold approximately five million units, leading Microsoft to question the viability of meeting higher sales targets for a proprietary handheld console.
In lieu of developing its own hardware, Microsoft has partnered with ASUS to release the ROG Xbox Ally, a Windows-based handheld gaming device featuring an Xbox-inspired interface. This collaboration allows Microsoft to extend its gaming ecosystem without the risks associated with hardware manufacturing.
Despite this shift, Microsoft has reaffirmed its commitment to the Xbox hardware platform. The company is actively investing in future first-party consoles and devices, including a next-generation Xbox console powered by AMD chips.
As of October 7, 2025, Microsoft Corporation's stock (MSFT) was trading at $524.12, reflecting a decrease of 0.84% from the previous close. The stock has experienced a 25.25% increase year-to-date, largely attributed to the company's advancements in artificial intelligence and cloud services.
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