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

A recent report has shed light on Microsoft's ambitious plans for its video game hardware, revealing that a full next-generation Xbox is slated for release in 2027, and an Xbox-branded gaming handheld is expected to hit the market in late 2025. This information, sourced from Windows Central, indicates a significant move by Microsoft to expand its gaming ecosystem.

The upcoming handheld, codenamed Keenan, is scheduled for a late 2025 launch and is being developed in partnership with PC gaming hardware manufacturers. This device aligns with Microsoft's strategy to merge Xbox and Windows experiences, as mentioned by Jason Ronald, the company's VP of 'Next Generation,' in an interview with The Verge earlier this year. However, it's important to note that Keenan is not a first-party Xbox handheld; Microsoft's gaming chief, Phil Spencer, has hinted that such a device is still several years away.

Turning to the next-gen Xbox, Windows Central reports that it is now fully in production and has been greenlit by Microsoft CEO Satya Nadella. This console, expected in 2027, is described as a premium successor to the Xbox Series X. Microsoft plans to complement this console with a first-party Xbox gaming handheld and new controllers, suggesting a comprehensive update to its console lineup. Notably, there are no plans for a direct next-gen successor to the Xbox Series S, indicating that the handheld may serve as the entry-level option in Microsoft's hardware range.

The next-gen Xbox is anticipated to be more akin to a PC than any previous Xbox model, with support for third-party storefronts such as Steam, the Epic Games Store, and GOG. Microsoft has also committed to continued backwards compatibility, ensuring that players can enjoy their existing game libraries on the new console. Xbox president Sarah Bond emphasized last year that Microsoft is pushing forward with its next-gen hardware, aiming for the most significant technological leap in a generation.

The broader context of the console market is one of uncertainty. The Xbox Series X and S have struggled in the ongoing 'console war,' and Sony has indicated that the PlayStation 5 is entering the second half of its lifecycle. Meanwhile, Nintendo is preparing to launch the Switch 2 later this year. Amidst these developments, there's growing concern about the future viability of traditional video game consoles.

Phil Spencer has noted in various interviews that the console market has not seen meaningful growth recently, with a static customer base increasingly focused on a few major titles. This stagnation has led to speculation about the long-term sustainability of consoles. However, former Xbox executive Peter Moore suggested last year that Microsoft would be actively discussing the future of consoles, and it appears that Microsoft has decided to double down on this front with its upcoming hardware announcements.