Overview

• The move underscores Microsoft’s preference for system-level enhancements in Windows 11 instead of developing a standalone handheld console.
• Asus’s Project Kennan, an Xbox-branded handheld PC built in partnership with Microsoft, is hardware complete and targeting a release later this year.
• Microsoft describes the shift as a resource reallocation rather than a cancellation and confirms no layoffs resulted from the change.
• The company maintains ongoing investment in its own Xbox handheld technology despite pausing first-party development.
• Concurrent upgrades to Xbox Cloud Gaming infrastructure aim to improve streaming performance across Windows 11 handheld devices.