Microsoft has reportedly postponed the development of its own portable gaming console indefinitely. Previously, it was assumed that the device would hit the market in 2027 along with the new generation of stationary Xbox consoles.

The project was intended to become a portable console solely produced by Microsoft. It is reported that three prototypes were created within the framework of the Microsoft Gen-10 initiative, but the portable console project has been postponed for now.
Microsoft still plans to create its own portable Xbox gaming console in the future, but currently the company has decided to redirect its resources to improving Windows 11 gaming performance. It is possible that the decision is related to the threat from SteamOS, which provides higher gaming performance on portable devices compared to Windows.
It looks like Microsoft's portable gaming console would be able to run full Xbox games. In other words, it wouldn't be a simple portable PC running Windows 11.
According to Windows Central, Microsoft will continue to invest in technology development for future Xbox portable consoles, but for now the priority has shifted to creating devices in collaboration with OEMs.
Recall that Microsoft and ASUS are preparing to release a portable console codenamed "Project Kennan". It is expected to hit the market later this year. The device will likely receive an AMD Z2 Extreme processor, but there is no confirmation yet.
Thanks to thecommunity for the heads up.
Source: Windows Central
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