According to Windows Central, Microsoft has decided to pause its plans to create an Xbox handheld companion to the successor of the Xbox Series X. This won’t affect the third-party handheld that is being made by Asus for an estimated late 2025 debut, but only Microsoft’s own project.

The report says that Microsoft has chosen to focus on improving the Windows 11 handheld gaming performance first and foremost, since it’s losing badly to SteamOS in that regard. That doesn’t mean the Xbox company has given up on its plans to eventually deliver a proper Xbox handheld; it’s just that the priority has shifted to improving the software side that will power the new device before actually building the hardware. Of course, that may affect the previously rumored launch date of 2027 alongside the next-generation Xbox home console.

As for Project Kennan, the device was featured earlier this month in a picture leak from the United States Federal Communications Commission (FCC). However, there is uncertainty regarding its specifications. According to that leak, the Xbox handheld would have been equipped with AMD’s AERITH Plus, a 4-core CPU, 16GB of RAM, and up to 20 watts of TDP. However, Windows Central’s new report reckons it might be using the new and more powerful AMD Ryzen Z2 Extreme, although they’re still seeking full confirmation of that.

It’s possible that the Xbox handheld might be revealed during the Xbox Game Showcase, scheduled to take place on June 8 at 10 am Pacific Time / 1 pm Eastern Time / 6 PM British Time. If not the hardware, though, Xbox fans can definitely count on there being many game reveals, trailers, and showcases for titles like Gears of War: E-Day, Fable, Clockwork Revolution, Perfect Dark, State of Decay 3, Everwild, and Contraband. Those are just the known quantities; there are bound to be a few surprises. Furthermore, after the event, a Direct-style presentation will be dedicated to Obsidian’s The Outer Worlds 2.