Microsoft is reportedly collaborating with a leading PC manufacturer to develop a new handheld gaming device. After years of struggling with suboptimal handheld PCs, the tech giant may be ready to unveil an Xbox-branded portable console as early as this year. This partnership aims to leverage the strengths of both companies, combining Microsoft's renowned gaming brand with the expertise of a seasoned player in the gaming hardware market. The device, codenamed "Keenan," will incorporate distinctive Xbox design features and a dedicated Xbox guide button, ensuring a seamless integration of the iconic gaming experience into a portable format. Moreover, it is expected to run on Windows 11, though with significant enhancements tailored specifically for controller-based navigation.

The primary focus of this collaboration is to revolutionize the user experience by simplifying Windows for handheld use. Currently, navigating Windows on handheld devices can be cumbersome and unintuitive. However, the new device promises to introduce a streamlined interface that makes using Windows more akin to operating a console. This move aligns with Microsoft's broader strategy to merge the best aspects of Xbox and Windows, creating a more intuitive and enjoyable gaming experience. Jason Ronald, Microsoft’s VP of “Next Generation,” highlighted this vision at CES 2025, emphasizing the company's commitment to making Windows more console-like for handhelds. While the initial device won't be produced directly by Microsoft, the company plans to offer a handheld-friendly version of its operating system to other manufacturers, similar to Valve's approach with SteamOS.

Looking ahead, the development of this handheld device could pave the way for future innovations in portable gaming. Phil Spencer, CEO of Microsoft Gaming, has previously expressed interest in handheld technology and acknowledged ongoing experimentation with prototypes. Although the first-party handheld may not debut immediately, the long-term outlook includes a successor to the Xbox Series X, advanced internet-connected controllers, and an official Xbox gaming handheld, all tentatively scheduled for 2027. This strategic move underscores Microsoft's dedication to advancing gaming technology and delivering cutting-edge experiences to players worldwide.