A recent report has shed light on Microsoft's ambitious plans for its video game hardware, revealing that a full next-generation Xbox is slated for release in 2027, and an Xbox-branded gaming handheld is expected to hit the market later in 2025. According to Windows Central, a partner PC gaming handheld codenamed "Keenan" is in development for a late 2025 launch, while the successor to the Xbox Series X and S is now "fully" in production and set to debut in two years.
Although Microsoft has not officially commented on these reports, its gaming executives have hinted at these developments in various interviews. In January, Jason Ronald, Microsoft's VP of 'Next Generation,' told The Verge that the company aims to integrate Xbox and Windows experiences for PC gaming handhelds produced by original equipment manufacturers (OEMs) such as Asus, Lenovo, and Razer. It's important to note that Keenan is not a first-party Xbox handheld, as Microsoft gaming boss Phil Spencer has indicated that a true Xbox handheld is still years away.
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Windows Central also reported that the next-gen Xbox has been fully approved by Microsoft CEO Satya Nadella. This premium successor to the Xbox Series X, along with a first-party Xbox gaming handheld and new controllers, is expected to complete Microsoft's console lineup by 2027. Interestingly, there are no plans for a direct next-gen successor to the less powerful Xbox Series S, suggesting that Microsoft may position its handheld to fill the role of a more affordable, less powerful console option.
The next-gen Xbox is anticipated to be more akin to a PC than any previous Xbox, with support for third-party storefronts like Steam, the Epic Games Store, and GOG. Continued backwards compatibility is also expected. Last year, Xbox president Sarah Bond emphasized Microsoft's commitment to the next generation of hardware, stating that the company is "moving full speed ahead on our next generation hardware, focused on delivering the biggest technological leap ever in a generation."
Amidst these developments, there is considerable speculation about the future of the console market. The Xbox Series X and S are struggling in the ongoing 'console war,' while Sony has indicated that the PlayStation 5 is entering the second half of its lifecycle. Nintendo is preparing to launch the Switch 2 later this year, yet there is growing concern that the traditional video game console business may be facing challenges.
Phil Spencer has noted in interviews that the console market has not seen significant growth in recent years, with a static customer base increasingly focused on a few major titles, leaving less room for other games. Last year, former Xbox executive Peter Moore told IGN that Microsoft would be considering the future viability of consoles. However, based on this latest report, it appears that Microsoft remains committed to the console market and sees a future in it.
