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, signaling a major push into the next generation of gaming. According to Windows Central, a new, fully next-gen Xbox is slated for release in 2027, while an Xbox-branded gaming handheld, codenamed Keenan, is expected to hit the market later in 2025.

The handheld, Keenan, is part of a broader strategy to integrate Xbox and Windows experiences on PC gaming handhelds developed by original equipment manufacturers (OEMs) like Asus, Lenovo, and Razer. This approach was hinted at by Jason Ronald, Microsoft’s VP of 'Next Generation,' in a January interview with The Verge. However, Keenan is not a first-party Xbox handheld, as Microsoft gaming boss Phil Spencer has suggested that a true Xbox handheld is still years away.

On the other hand, the next-gen Xbox, which has reportedly received full approval from Microsoft CEO Satya Nadella, is described as a premium successor to the Xbox Series X. This new console, expected in 2027, will come alongside new controllers and possibly a first-party Xbox gaming handheld. Notably, Microsoft seems to be steering away from a direct next-gen successor to the less powerful Xbox Series S, potentially positioning the upcoming handheld to fill the role of a more affordable gaming option.

Windows Central suggests that this next-gen Xbox will be more akin to a PC than any previous Xbox, featuring support for third-party storefronts like Steam, the Epic Games Store, and GOG. Backwards compatibility is expected to continue, ensuring that players can enjoy their existing game libraries on the new hardware.

Last year, Xbox president Sarah Bond emphasized Microsoft's commitment to advancing their next-generation hardware, promising "the biggest technological leap ever in a generation." This statement aligns with the reported developments and underscores Microsoft's dedication to pushing the boundaries of gaming technology.

The future of consoles remains a topic of much speculation. The Xbox Series X and S have struggled in the competitive landscape, often referred to as the 'console war,' while Sony has indicated that the PlayStation 5 is entering the latter part of its lifecycle. Meanwhile, Nintendo is gearing up to launch the Switch 2 later this year. Amid these developments, there are growing concerns about the sustainability of the traditional video game console market.

Phil Spencer has acknowledged the stagnation in the console business, noting a static customer base that predominantly engages with a few major titles. This observation was echoed by former Xbox executive Peter Moore, who last year suggested to IGN that Microsoft might be reevaluating the future of consoles. However, based on the latest report, it appears that Microsoft is firmly committed to the console market and is betting on significant innovation to revitalize it.