A couple of weeks ago, Microsoft centric website Windows Central revealed that the company had paused its work on the Xbox handheld project. This did not affect the partnership with ASUS to make the ROG X Ally and ROG X Ally X, which were announced at the Xbox Games Showcase 2025 for a holiday release window.

Originally, Microsoft planned to use this partnership as a stopgap while it produced its own Xbox handheld that would have been released alongside the next-generation Xbox home console. These plans, however, are more than just paused – they might be practically dead now, according to The Verge’s Tom Warren. In his latest paywalled Notepad newsletter, Warren says that Microsoft will focus on the software platform instead. Furthermore, he points out that while there will be an ‘official’ next-generation hardware from Microsoft, OEM partners like ASUS may also release their own versions of a next-gen Xbox console.

In that regard, Warren believes that the ASUS-made handhelds are a sort of ‘market test’ for Microsoft’s increasingly tight integration of Windows and Xbox, not to mention the ambitious goal of turning every screen into an Xbox. The Verge’s journalist adds that, at some point, the emulation project established by Sarah Bond in early 2024 may solve the issue. Until then, Xbox Play Anywhere and Xbox Cloud Gaming streaming are doing most of the work in helping spread the brand across devices.

Last year, Microsoft has made some lofty promises when it comes to the next-generation console, claiming that the successor of the Xbox Series X would deliver the ‘largest technical leap ever seen’ from one generation to another. That’s certainly an ambitious goal that could possibly only be achieved through the implementation of machine learning algorithms, although we’ll have to wait until Microsoft reveals its hand before assessing the veracity of that statement. The next Xbox is currently thought to be targeting a 2027 launch, presumably near the holiday season.