Phil Spencer, the head of Microsoft’s gaming division, has been quite vocal about his interest in developing an Xbox handheld to rival the hottest handheld gaming PCs, like the Steam Deck OLED and the Asus ROG Ally X. However, during a chat with Bloomberg, Spencer tempered expectations, indicating that we shouldn’t expect such a device to hit the market soon.
During the discussion, Spencer mentioned that while there’s an “expectation” for Microsoft to develop something in that space, it’s not something we should be holding our breath for over the next couple of years.
“Looking ahead, I’m really enthusiastic about us creating devices,” Spencer shared with Bloomberg. “I believe our team can do some really innovative work, but we want to learn from what’s happening in the industry now before moving forward.”
For the time being, Microsoft’s focus is honing the Xbox app experience on the current crop of PC gaming handhelds, ensuring Xbox features and games integrate smoothly. Recently, they rolled out a “compact mode” update to the Xbox app for Windows, aimed specifically at enhancing mobile device usability. Many critics, myself included, have pointed out that Windows 11 has been a less than ideal fit for handhelds like the ROG Ally and Lenovo Legion Go.
The interview also highlighted Microsoft’s ongoing interest in acquisitions, following their massive $69 billion acquisition of Activision Blizzard in 2023. They’re also working on mobile game stores, though that’s taken longer than anticipated.
Since its 2022 debut, the Steam Deck has set the stage as the modern handheld gaming PC standard. While it has received an OLED upgrade, a more powerful chip is still missing, and Valve hasn’t hinted at an immediate update. With AMD’s Ryzen Z1 Extreme powering most popular Windows handhelds, the PC gaming handheld market remains largely in its first generation.
Meanwhile, Spencer shared with Bloomberg that despite Xbox lagging behind the Nintendo Switch and PlayStation 5, the business is thriving. “Our business performance right now looks promising, paving the way for a healthier future for both hardware and game development.” This success is buoyed by an uptick in PC and cloud gaming, alongside their conventional console business.
If Microsoft eventually rolls out an Xbox handheld, it will need to stand out vastly from competitors like the Steam Deck and devices from Lenovo, MSI, and Asus. These upcoming years could bring some exciting developments, so entering the scene later will require something truly groundbreaking.
