New Xbox Report Claims Microsoft Is Developing a Steam Deck Competitor

Xbox's long-rumored handheld could drop in 2026.

By Logan Moore

It continues to sound as though Microsoft is going to get into the handheld space with a new Xbox device. Over the past year, rumors have continued to grow suggesting that an Xbox handheld is in the works at Microsoft. This is something that Xbox boss Phil Spencer seems to have even alluded to on a couple of different occasions. Now, new reporting has come about to further corroborate these past rumors and might give us an idea of when the Xbox hardware could launch. 

Coming from Windows Central, the publication reports that Xbox is internally developing "its own take on the Steam Deck." Further details on the handheld are still limited, but this Steam Deck comparison is one that lines up with what those at Microsoft itself have previously said. Specifically, Spencer stated earlier in 2024 that it would be important for any potential handheld tied to Xbox to be able to play games natively. While cloud streaming is something that Xbox has invested heavily in over the years, it seems this technology won't be at the center of this much-theorized handheld. 

Beyond this, the report goes on to state that 2026 could be the year in which the Xbox handheld would launch. The reason for this is twofold as 2026 will mark the 25th anniversary of the Xbox brand. Microsoft itself even recently teased that it's "building plans for the 25th anniversary of Halo and Xbox" for 2026. Whether or not part of this celebration would result in the release of a new handheld isn't known for certain, but it would make sense. 

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The other reason that 2026 is being eyed in this manner is because Microsoft is choosing to skip out on releasing a mid-generation upgrade of the Xbox Series X. While the previous generation saw Microsoft release the Xbox One X as a way of competing with the PS4 Pro, that won't be the case this time around as Sony is gearing up to let loose the PS5 Pro. As a result, Microsoft seems to have altered its timelines for new hardware releases, which further puts a spotlight on 2026. 

Perhaps the biggest question tied to a potential Xbox handheld, though, would be whether or not it can change Microsoft's hardware sales. Based on what we know, the Xbox Series X and S have failed to meet the expectations of Microsoft, which is one reason why Xbox seems to now be releasing more of its games on competing platforms. Whether or not a dedicated Xbox handheld could do drastically change Microsoft's fortune as a hardware company isn't known, but it'll be worth monitoring in the months and years ahead. 

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