Full Next-Gen Xbox Reportedly Set for 2027, Xbox-Branded Gaming Handheld Due Out Later in 2025

A new report reveals Microsoft's ambitious plans for its video game hardware lineup. The report claims a next-generation Xbox console, slated for release in 2027, is currently in full production. Furthermore, an Xbox-branded handheld gaming device is expected to launch later in 2025.

Windows Central, the source of this report, details a partner PC gaming handheld, codenamed "Keenan," scheduled for a late 2025 release. This device is distinct from a first-party Xbox handheld, which Microsoft's Phil Spencer has indicated is still several years away. Microsoft's January comments from Jason Ronald, VP of 'Next Generation,' regarding collaboration with OEMs on PC gaming handhelds align with this report, though without confirming the "Keenan" project specifically.

The next-generation Xbox, reportedly approved by CEO Satya Nadella, is positioned as a premium successor to the Xbox Series X. This, along with a first-party Xbox handheld and new controllers, aims to complete Microsoft's 2027 console offering. The report suggests no direct successor to the Xbox Series S is planned, potentially positioning the handheld to fill that market segment.

Windows Central anticipates the next-gen Xbox will have a more PC-like architecture than previous iterations, supporting third-party storefronts like Steam, the Epic Games Store, and GOG, while maintaining backwards compatibility. This aligns with Xbox president Sarah Bond's statement last year about Microsoft's focus on a significant technological leap in its next-generation hardware.

The future of the console market is currently a subject of much debate. The Xbox Series X and S have faced challenges in the market, and Sony has indicated the PlayStation 5 is nearing the midpoint of its lifecycle. While Nintendo prepares for the Switch 2 launch later this year, concerns remain about the traditional console market's sustainability. Phil Spencer has acknowledged the lack of significant growth in recent years, citing a large but stagnant customer base focused on a limited number of blockbuster titles.

Despite these challenges, this latest report suggests Microsoft remains committed to the console market, planning a significant investment in new hardware for 2025 and 2027.