Microsoft is reportedly shifting its focus in the gaming handheld market towards enhancing the operating efficiency of Windows 11 on these devices. this strategic move suggests that the release of a dedicated Xbox handheld console might potentially be further off than initially anticipated.

While numerous gaming handhelds already utilize the Windows 11 operating system, user experience often lags behind that of the Steam Deck, which runs on SteamOS. Valve’s plans to expand SteamOS availability to more handheld consoles puts pressure on Microsoft to refine the Windows 11 experience for gaming.

According to Windows Central, Microsoft’s current development efforts are centered on optimizing Windows 11 performance for handheld gaming devices. The rumored Xbox handheld console might not debut until 2027, potentially coinciding with the launch of the next generation of Xbox consoles.

In the near term, Microsoft is expected to collaborate with Asus on a gaming console codenamed “Project Kennan.” This device, potentially launching later this year, will feature the AMD Ryzen Z2 Extreme processor, an optimized version of Windows 11, and a new operating handle interface.

Microsoft hopes to further improve the experience of Windows 11 operating system for game handheld consoles.