Microsoft is reportedly working on an Xbox-branded handheld gaming device, set to launch in 2025, according to Windows Central. Codenamed “Keenan,” the device is being developed in partnership with a PC gaming original equipment manufacturer and will feature Xbox’s signature design elements, including an official Xbox guide button.

This news comes as a surprise, given that Microsoft Gaming CEO Phil Spencer had previously suggested that an Xbox handheld was still years away. However, recent developments indicate that plans have moved forward sooner than expected. The 2025 handheld is not the same as the proprietary Xbox handheld rumored to be part of Microsoft’s next-generation hardware lineup, expected in 2027. Instead, the Keenan device appears to be a partner-driven project, similar to Lenovo’s collaboration with Valve for the Legion Go S.

One of the key aspects of the Keenan handheld is its reported use of a full Windows operating system. This would allow players to access Microsoft’s ecosystem, including the Microsoft Store, PC Game Pass, and third-party platforms like Steam and Epic Games Store. In this sense, the device would function more like a portable gaming PC with Xbox branding rather than a traditional console-like handheld. If these reports are accurate, the Keenan handheld could offer a more flexible experience compared to dedicated handheld consoles such as the ASUS ROG Ally and Lenovo Legion Go, which also run Windows but require heavy software customization for a smoother gaming experience.

Microsoft’s current hardware plans extend beyond the Keenan handheld, with a next-generation Xbox console lineup reportedly scheduled for 2027. This lineup is expected to include a successor to the Xbox Series X and an in-house Xbox handheld. Microsoft has also been making efforts to integrate its gaming ecosystem more closely with Windows, breaking down barriers between console and PC gaming. This shift suggests that Xbox hardware may eventually resemble gaming PCs more closely, simplifying game development and creating a more unified experience across platforms.

At the same time, Microsoft has been expanding its gaming presence beyond Xbox consoles. More Xbox titles are making their way to PlayStation and PC, raising questions about the long-term role of dedicated Xbox hardware. The Keenan handheld could be a step toward offering Xbox games and services across a wider range of devices, even as the company continues to explore new hardware options.

For now, Microsoft has not officially confirmed the existence of the Keenan handheld or its next-generation console plans. Until an official announcement is made, details remain subject to change. However, reports of an Xbox-branded handheld indicate that Microsoft is actively considering new ways to reach gamers beyond traditional consoles.