A decision that surprised many in the gaming community, Microsoft has postponed the development of its long-awaited Xbox handheld console. The move comes as the company focuses attention on improving Windows 11 gaming capabilities on third-party handheld hardware, including ASUS's Project Kennan.
The market for gaming consoles has been experiencing massive growth, with the handheld segment accounting for around 35% of revenue share in 2024. Global handheld game console market, estimated at $4.6 billion in 2024, is anticipated to grow to $11.3 billion in 2035 with a CAGR of 8.6% during the forecast period (2025–2035). This is driven by higher demand for mobile gaming solutions due to technological advancements and the global popularity of mobile gaming.
Apart from this, the move by Microsoft to pause its handheld development is a testament to the issues facing the company in this market. One of the main reasons would be the need to enhance Windows 11 performance on handhelds, particularly against competition from platforms such as Valve's SteamOS, which provides improved game performance and battery life.
Click To get details about Handheld Game Console Market (Including Full TOC, Full Report Description, Research Methodology, and Infographics) @
https://www.omrglobal.com/industry-reports/handheld-game-console-market
Advancing a portable gaming console involves special challenges. Handheld consoles, unlike several traditional consoles, achieve a fine balance between performance, battery life, and portability. Microsoft Windows 11, primarily developed for desktops, further faces optimization issues on handheld platforms, resulting in inefficiency and decreased battery life.
Furthermore, Microsoft is dealing with challenges from strong competitors in the handheld gaming market. The Nintendo Switch, with its hybrid design and huge gaming library, has a significant market share. Sony's PlayStation Portal and Valve's Steam Deck have major niches by providing unique features and better gaming experiences.
This is not the first time that Microsoft has wanted to enter the handheld gaming market. Throughout the years, the company has worked on several prototypes, but none of them reached the market. Phil Spencer, CEO of Microsoft Gaming, confirmed there were Xbox handheld prototypes in the past, highlighting the company's continued interest in the category.
Nonetheless, the constant refrain has been to design Windows into a handheld form without the loss of performance or customer experience. The recent decision to delay advancement is an acknowledgment by Microsoft of these consistent challenges.
As Microsoft's internal handheld project is postponed, however, the company is not leaving the handheld business completely. The company is teaming up with partners such as ASUS on initiatives such as Project Kennan with a focus, providing optimized gaming experiences on Windows-based handheld devices.
This strategic shift enables Microsoft to benefit from its software background without having to directly tackle the hardware challenges of handheld console advancement. The company puts emphasis on improving Windows 11's performance and compatibility on these devices. Microsoft's goal is to retain its position as a leading player in the evolving gaming market.
Conclusion
Microsoft's decision to halt its Xbox handheld development underscores several difficulties of entering a market of many established competitors and the various technological hurdles of taking desktop-centric software to portable forms. Although the vision for a standalone Xbox handheld is not completely stopped, the company initially presented an approach that focuses on collaboration and software optimization to navigate the competitive handheld gaming space.