Xbox Reportedly Pauses First-party Handheld Plans As It Seeks Battle With Valve

It’s no secret that Xbox really wants in on the handheld gaming hype cultivated by the likes of the Nintendo Switch and, more specifically, Valve’s Steam Deck. The company recently made it clear that it would stoop to using Asus’ custom hardware to get its name out there while it worked in secret on the native handheld. According to Windows Central, Microsoft has reportedly hit the pause button on those particular plans.

Xbox isn’t backing down

Instead, it’ll double down on the Asus/Xbox partnership in a bid to beat Valve at its own game: gaming handhelds. Judging by the recent leaks circulating around the Asus ROG Ally 2, Xbox edition, it’s doing just that. Microsoft has decided to “prioritize its teams to improve Windows 11 gaming performance, specifically for devices like the ASUS partner device Project Kennan.”

While this deviation by no means indicates Microsoft is giving up on its native handheld ambitions forever, there’s no guessing when Microsoft might set its mind back on the task. Unnamed sources say that the company is still “deeply investing” in its custom handheld hardware dreams, but that it told its teams internally this morning to place a larger focus on third-party OEM handhelds in the meantime.

Why the sudden shift? Windows Central mentions that it may have something to do with Valve’s recent SteamOS successes. Once reserved for Valve’s own hardware, the mission has since expanded to make the Linux-based software available everywhere, starting with Lenovo’s Legion Go S. If Microsoft doesn’t intervene, and soon, it runs a real risk of other developers ditching Windows 11 in favour of SteamOS for good.

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