Not that long ago, an Xbox executive claimed that an Xbox handheld gaming device is still in the prototyping stage, with a launch expected to take place sometime in the next two to three years. There is no denying that the handheld segment is an incredibly lucrative space, boosted by the impressive performance and efficiency gains made by the chip giants in recent years. Microsoft clearly intends to take a piece of the pie, and as a recent report by Windows Central pointed out, the first Xbox-branded handheld is in development and may even see the light of day as early as the third or fourth quarter of this year. Now, a fresh report by The Verge has revealed that Microsoft might be collaborating with ASUS in order to bring the handheld gaming device to market.

This is quite interesting, considering that ASUS is one of the most well-known players in the handheld segment, thanks to its ROG Ally lineup. But the conflict of interest shouldn't be much of a hassle - Lenovo is also a major player in the segment, and did not hesitate teaming up with Valve to bring the first third-party SteamOS handheld to the market. Microsoft is likely targeting something similar, intending to combine Xbox and Windows platforms in order to improve the experience for developers and players alike, allowing better inter-compatibility of games between handheld, PC, and console platforms. Essentially, the handheld will reportedly feature an Xbox-like interface, but will be powered by Windows underneath. The aforementioned late-2025 launch timeline is still in place, but considering the very nature of early reports, accept this information with a grain of salt.