Microsoft cancels its true portable Xbox as it focuses on ROG Xbox Ally, according to insiders, is this the right move?
Insiders report that Microsoft has scrapped its native Xbox handheld, shifting focus to ASUS’s ROG Xbox Ally instead.
During the Xbox Games Showcase 2025, Microsoft unveiled the ROG Xbox Ally, a PC handheld branded as an Xbox device. However, this machine only runs PC games, meaning it isn’t a true Xbox console.
According to Tom Warren of The Verge, Microsoft had been developing a native Xbox handheld, capable of running Xbox console games natively, but the project has now been canceled.
Why did Microsoft cancel its own handheld?
Industry insiders suggest that Microsoft saw the two models of ROG Xbox Ally as sufficient, making a dedicated Xbox handheld redundant. However, many argue that a true Xbox handheld, able to run native Xbox titles from past generations, would have been a highly competitive device.
The gaming giant has struggled with hardware branding confusion before. Critics like Cliff Bleszinski claim the Xbox Ally branding is misleading, as the device functions purely as a PC, despite being marketed under the Xbox name.
Is Microsoft making the right call?
Microsoft has historically been a software-first company, with Game Pass, cloud gaming, and PC integration driving its success. By partnering with ASUS instead of developing its own hardware, Microsoft avoids manufacturing risks while expanding Xbox’s reach into the PC gaming market.
However, a true Xbox handheld with full backward compatibility and native Xbox game support could have been a game-changer, appealing to players nostalgic for past Xbox generations.
With competition from Steam Deck, Lenovo Legion Go, and ASUS ROG Ally, Microsoft risks missing an opportunity in the handheld gaming market.
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