Microsoft is working on a partner gaming handheld with ASUS, set to launch later this year. Project "Kennan" is part of a wider effort at Microsoft to engage OEMs on Xbox-style gaming hardware.

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.

From a purely logical standpoint, Asus as a hardware partner makes a lot of sense given it already has the ROG Ally, which is a fairly robust Windows 11 handheld PC that can run games in the Xbox Game Pass PC catalog both natively and via cloud-powered streaming.

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 a new report, Microsoft will partner will a gaming PC manufacturer on the first official Xbox handheld console this year.

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