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

A new report reveals Microsoft's ambitious plans for its video game hardware lineup. The report alleges a next-generation Xbox console, slated for release in 2027, is currently in full production. Furthermore, an Xbox-branded handheld gaming device is expected to launch later in 2025.

Windows Central, the source of this report, details a partner PC gaming handheld codenamed "Keenan," targeting a late 2025 release. This device is distinct from a first-party Xbox handheld, which Microsoft's Phil Spencer has indicated is still several years away. Microsoft's VP of Next Generation, Jason Ronald, previously hinted at collaboration with OEMs (like Asus, Lenovo, and Razer) to integrate Xbox and Windows experiences in PC gaming handhelds.

The next-generation Xbox, reportedly approved by Microsoft CEO Satya Nadella, is described as a premium successor to the Xbox Series X. This console, along with a first-party Xbox handheld and new controllers, will complete Microsoft's 2027 console offering. The report suggests no direct successor to the Xbox Series S is planned, potentially positioning the handheld to fill the more affordable market segment.

Windows Central anticipates this next-gen Xbox will have a more PC-like architecture than previous iterations, supporting third-party storefronts such as Steam, the Epic Games Store, and GOG. Backward compatibility is expected to continue. Xbox president Sarah Bond previously stated Microsoft is "moving full speed ahead on our next generation hardware," aiming for a significant technological advancement.

The future of the console market is subject to much speculation. The Xbox Series X and S have faced challenges in the market, and Sony has indicated the PlayStation 5 is nearing the midpoint of its lifecycle. While Nintendo is preparing to launch the Switch 2 later this year, concerns persist about the traditional console market's viability. Phil Spencer has acknowledged the lack of significant growth in the console market in recent years, noting a large but static customer base focused on a few major titles. Despite these challenges, this latest report suggests Microsoft remains committed to the console market.