Microsoft may have delayed new Xbox console to make Windows-based handheld PC competitive with SteamOS

Benchmarks with the SteamOS version of the Lenovo Legion Go S have shown dramatic performance bumps. The handheld PC previously only used Windows, which is less efficient and more resource-intensive. Insider Jez Corden speculates that this may have led to the delay of a new Xbox console. According to Corden, Microsoft is focusing on improving existing Windows handhelds instead.

It's easy to become confused by Microsoft's plans for future gaming systems. Project Kennan, an Asus and Microsoft collaboration for an Xbox-themed Windows handheld, may still surface in 2025. However, despite prioritizing cross-platform games, the company hasn't abandoned traditional consoles. Another Xbox handheld, solely marketed by Microsoft, was anticipated for 2027. Living rooms may see a powerful console debut in the same time frame.

The delay hasn't impacted the development of an Xbox Series X successor. On the other hand, the status of the Xbox handheld is now unclear. Meanwhile, Project Kennan is still very much alive. Reports suggest that Microsoft will utilize the handheld PC to introduce UI enhancements. The goal is to make the system easier to navigate for gamers than Windows currently allows.

Interface tweaks alone won't close the performance gap with SteamOS. Valve is also working to make the operating system an option with more AMD Ryzen handhelds. With superior battery life and frame rates, Windows alternatives are increasingly less desirable. That said, even with SteamOS making strides, Windows machines still have an edge in terms of compatibility.

The postponement of an Xbox handheld could give Microsoft time to optimize its OS. Of course, there are other theories as to why it's not anxious to invest in a fresh console concept. Tariff threats led to price increases with the Xbox Series X and S. In this economic climate, selling a new system at a reasonable price is a significant challenge.