Sources say that Asus and Microsoft are working together to build the first Xbox handheld gaming console for launch later this year.

I understand the Xbox work that has hit the headlines this week is actually called Project Kennan, not Keenan. I’m told that Kennan is the codename for a handheld that is being manufactured by Asus, and it’s part of a larger effort from Microsoft to unify Windows and Xbox towards a universal library of Xbox and PC games.

Those rumors about Microsoft making it own Xbox handheld may have been hasty, but we could see the Xbox version of SteamOS instead.

New Xbox handheld reports say Asus, the creator of the ROG Ally line of handheld gaming PCs, is partnering with Microsoft on the project.

ASUSs upcoming Xbox handheld gaming console will run on Windows but will feature a more user-friendly Xbox interface to enhance the gaming experience.

Microsoft’s gaming chief Phil Spencer said that he wanted handheld gaming PCs to feel more like an Xbox. But as the saying goes, if you want something done right, do it yourself. Thus, Microsoft is reportedly working on its own handheld Xbox PC console.

According to Windows Central ’s Jez Corden, Microsoft is working with an unspecified PC gaming manufacturer on an “Xbox-branded gaming handheld.” Corden’s sources claim that this unannounced device, code-named “Keenan,” could arrive sometime in the back half of 2025.

Earlier this week, it was reported that Microsoft was planning the release of an Xbox handheld that’s set to launch sometime in 2025, and it looks like that handheld is going to be manufactured by ASUS.