A recent report has shed light on Microsoft's ambitious plans for its video game hardware, revealing that a full next-generation Xbox console is slated for release in 2027, while an Xbox-branded gaming handheld is expected to hit the market later in 2025. According to Windows Central, a partner PC gaming handheld codenamed Keenan is in development and set to launch in late 2025, while a successor to the Xbox Series X and S is now in full production and scheduled for a 2027 debut.
Although Microsoft has not officially commented on these reports, its gaming executives have hinted at these devices in various interviews. In January, Jason Ronald, Microsoft’s VP of 'Next Generation,' told The Verge that the company aims to integrate Xbox and Windows experiences for PC gaming handhelds manufactured by third-party OEMs, such as Asus, Lenovo, and Razer. It's important to note that Keenan is not a first-party Xbox handheld; Phil Spencer, the head of Microsoft gaming, has indicated that a first-party Xbox handheld is still years away.
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The next-gen Xbox, as reported by Windows Central, has received full approval from Microsoft CEO Satya Nadella. This premium successor to the Xbox Series X is expected to launch alongside a first-party Xbox gaming handheld and new controllers, rounding out Microsoft’s console offerings by 2027. Notably, Microsoft does not seem to be planning a direct next-generation successor to the less powerful Xbox Series S, possibly positioning the new handheld to fill the role of a more affordable, entry-level device.
Windows Central also suggests that the upcoming Xbox will resemble a PC more than any previous Xbox model, with support for third-party storefronts like Steam, the Epic Games Store, and GOG. Backwards compatibility is expected to continue, ensuring players can enjoy their existing game libraries.
Last year, Xbox president Sarah Bond emphasized Microsoft’s commitment to advancing its next-generation hardware, stating the company is "moving full speed ahead on our next generation hardware, focused on delivering the biggest technological leap ever in a generation."
Amidst these developments, there is considerable speculation about the future of video game consoles. The Xbox Series X and S are struggling in the ongoing 'console war,' while Sony has hinted that the PlayStation 5 is nearing the second half of its lifecycle. Nintendo is preparing to launch the Switch 2 later this year, yet there is growing concern that the traditional console market may be at risk.
Phil Spencer has noted that the console market has not grown significantly in recent years, maintaining a sizable but stagnant customer base that predominantly plays a few massive titles. This trend leaves limited space for other games. Last year, former Xbox executive Peter Moore discussed with IGN whether consoles have a future at all. However, the latest reports suggest that Microsoft believes they do and is actively investing in their development.
