Full Next-Gen Xbox Reportedly Set for 2027, Xbox-Branded Gaming Handheld Due Out Later in 2025

A recent report from Windows Central has shed light on Microsoft's ambitious plans for its video game hardware. The tech giant is reportedly gearing up to launch a full next-gen Xbox in 2027, alongside an Xbox-branded gaming handheld expected to hit the market in late 2025. This handheld, codenamed Keenan, is said to be a partner PC gaming device, not a first-party Xbox product, which Microsoft gaming boss Phil Spencer has hinted might be years away.

According to the report, the next-gen Xbox, which is now fully in production, has received the green light from Microsoft CEO Satya Nadella. This premium successor to the Xbox Series X is anticipated to be more akin to a PC than any previous Xbox console, supporting third-party storefronts such as Steam, the Epic Games Store, and GOG, while maintaining continued backwards compatibility. Alongside the new console, Microsoft plans to introduce new controllers and a first-party Xbox gaming handheld, aiming to complete its console lineup by 2027. Notably, there seems to be no direct next-gen successor planned for the less powerful Xbox Series S, suggesting that the handheld might fill the niche for a more affordable gaming option.

Microsoft's gaming executives have been dropping hints about these developments. In January, Jason Ronald, Microsoft’s VP of ‘Next Generation,’ spoke to The Verge about merging Xbox and Windows experiences for PC gaming handhelds produced by original equipment manufacturers (OEMs) like Asus, Lenovo, and Razer. Last year, Xbox president Sarah Bond emphasized Microsoft's commitment to "moving full speed ahead on our next generation hardware, focused on delivering the biggest technological leap ever in a generation."

The future of traditional video game consoles is under scrutiny, with the Xbox Series X and S struggling in the ongoing 'console war,' and Sony indicating that the PlayStation 5 is entering the latter half of its lifecycle. Nintendo is set to launch the Switch 2 later this year, amidst concerns about the viability of the console market. Xbox head Phil Spencer has noted the stagnation in console growth, with players increasingly focusing on a few major titles. This situation led former Xbox executive Peter Moore to question the future of consoles in an interview with IGN last year.

Despite these challenges, Microsoft appears determined to forge ahead with its console strategy, as outlined in the recent report. This move signals their belief in the continued relevance and potential growth of the video game console market.