Don’t panic—Microsoft isn’t pulling the plug on the Xbox Ally. But the recently announced handheld does appear to be filling the space once reserved for something else: a dedicated Xbox handheld console that’s no longer in development.
For months, rumors swirled around Microsoft entering the portable gaming scene. The company was reportedly in talks with hardware partners, and many assumed they were building a handheld Xbox in-house.
As it turns out, that was indeed the plan—until it wasn’t.
Sources speaking to The Verge say Microsoft originally intended to create a native handheld console. But those plans were shelved as the company shifted its focus, ultimately deciding to team up with ASUS to bring the Xbox Ally to life.
From a business standpoint, the pivot makes sense. Instead of sinking resources into developing its own device from scratch, Microsoft can lean into strategic partnerships and pour more energy into making Xbox games accessible across platforms, which has become a major pillar of their strategy.
Still, some fans are left wondering: What would Microsoft’s in-house handheld have looked like? How much would it have cost? With early estimates for the Xbox Ally landing somewhere north of £500—and possibly even beyond £700—it’s fair to speculate that a homegrown version might have been more affordable or sported a unique design.
The ASUS partnership offers a different kind of opportunity, though. It allows Microsoft to blend the console and Windows experiences more seamlessly through software, something that’s increasingly central to Xbox’s evolving ecosystem.
It’s a little disappointing that we’ll never see Microsoft’s original concept. But since the company never officially revealed anything, all we can do is guess at what might’ve been.
One thing is certain: the Xbox Ally is coming, and it’s expected to hit the shelves by the holiday season of 2025. So if you’re planning to grab one, it might be time to start saving.
