Hyderabad: 

This appears to be a strategic move from the company as it faces tight competition from Valve’s SteamOS platform for handheld gaming consoles. Industry veterans have found mobile gaming devices powered by the latter offer better performance and battery efficiency than Windows-powered handheld consoles.

Redmond-based tech giant Microsoft has temporarily paused the development of a native Xbox handheld gaming console, says a report. Instead, the software major is shifting its focus to optimise and enhance the performance of Windows 11 for third-party handheld gaming devices, especially for its upcoming Asus partner device, codenamed "Project Kennan".

Microsoft focuses on Windows 11 amid threat from SteamOS:

Microsoft is instead focusing on improving the software for the upcoming Asus handheld, planned to be launched later this year. The next ROG Ally from Asus is expected to feature an AMD Z2 Extreme processor. The hardware development of the handheld gaming device is reportedly complete, with software optimisation being in the works.

According to a report from Windows Central, while Microsoft's first-party handheld project, which was slated to be launched in 2027 alongside the next Xbox console, has been put on the back burner, the project is not dead. The company still wants to make its own Xbox handheld in the future, but the timeline is not so clear now.

The shift of focus on software optimisation comes as SteamOS poses an increasing threat to Windows’ gaming dominance in the handheld category. Recent tests showcase how SteamOS has significant battery and performance enhancements when installed on Windows-based handhelds. YouTuber Dave Lee did a comparison of Legion Go's Windows and SteamOS models to conclude that "Windows was the problem all along".

Microsoft continues to develop its new Xbox cloud systems, which aim to match the latency performance of the NVIDIA GeForce Now cloud gaming service. Moreover, the tech giant has also cancelled its cloud-focused mini console, Hobart, as part of the company’s broader strategic realignment.

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