In surprise move, Microsoft teams up with ASUS to challenge Nintendo and Steam Deck in a newly re-ignited handheld console market
For the first time in its decades-long history in gaming, Microsoft is bringing Xbox beyond the living room and into players’ hands—literally.
On Monday, the company unveiled its new ROG Xbox Ally and Ally X handhelds, marking Xbox’s long-anticipated debut in the portable gaming space. Built in collaboration with ASUS, these sleek, full-featured handhelds are designed to deliver an on-the-go Xbox experience without cutting corners.
And it’s not just hype. Microsoft is finally joining the portable console race, elbowing into a market dominated for years by Nintendo and recently shaken up by Valve’s Steam Deck.
A Big Leap for Xbox — or Maybe a Catch-Up?
The move is a significant pivot for Microsoft, which, until now, had kept its gaming hardware tied to living rooms, desktops, and cloud infrastructure. Unlike Sony, which once had the PSP and PS Vita, or Nintendo, whose Switch reigns supreme in portability, Xbox never had a handheld.
That changes now.
Microsoft says these new ROG Xbox Ally devices offer everything you’d expect from a modern Xbox—streaming, cloud gaming, and high-fidelity graphics—but in a smaller frame.
“This is a full Xbox in your hands,” said a Microsoft representative, adding that the goal was “to meet players where they are—anywhere, anytime.”
The announcement landed just days after Nintendo revealed the upcoming Switch 2, heating up a handheld arms race that hasn’t been this intense in over a decade.
So, What’s Under the Hood?
The devices, powered by AMD Ryzen Z1 and Z1 Extreme chips, don’t skimp on performance. They’re running Windows 11 under the hood, meaning they can also support Steam, Epic, and other PC platforms. Basically, you’re looking at a high-powered PC disguised as a console.
Both the standard Ally and the upgraded Ally X are outfitted with:
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Full HD 120Hz displays
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Xbox Game Pass integration out-of-the-box
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Native cloud gaming capabilities
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Long-lasting battery (with the X model touting even more juice)
The Ally X, a premium version of the base model, also boasts improved thermals and increased RAM—key upgrades for players chasing smoother, lag-free sessions.
And it’s not all vaporware. Units are reportedly shipping soon, with pricing yet to be announced officially.
Why This Timing Matters
There’s no denying that handheld gaming is having a moment. Steam Deck sales have taken off. Nintendo’s Switch continues to dominate charts. Even Logitech, Ayaneo, and others have jumped into the arena.
Microsoft, usually focused on its cloud and console-first strategies, seems to have read the writing on the wall.
Here’s what’s changed:
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Cloud gaming is maturing, and it’s now viable over average mobile internet
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Gamers want flexibility without needing to dock or plug in
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A younger generation is growing up on portable-first gaming experiences
The company knows it’s late to the party—but it’s trying to make a splash big enough to justify the wait.
A Game of Ecosystems
This isn’t just about a flashy piece of tech. For Microsoft, the ROG Xbox Ally line is another Trojan horse into the broader Xbox ecosystem.
Xbox Game Pass, Microsoft’s Netflix-for-games subscription, is the crown jewel here. And it’s front and center on these handhelds.
With players already plugged into Xbox’s cloud and digital services, the Ally devices offer a way to extend engagement without forcing hardware upgrades at home.
The real goal? Keep players inside the Xbox world—whether they’re on the couch or on the bus.
Some Caution Signs Linger
Not everything is roses. There’s a decent list of “let’s wait and see” questions.
For starters, running full Windows 11 on a handheld still isn’t a seamless experience. Software updates, UI scaling issues, and occasional driver hiccups can complicate the plug-and-play expectation.
Also, price will matter. A lot. If the Ally X comes in too close to the $700+ mark, some might look back at their Steam Deck or Nintendo Switch with less regret.
Then there’s battery life. As always with portable gaming, real-world usage may not match spec-sheet dreams.
Still, Microsoft’s timing might be spot on. As the line between console and PC blurs, and cloud infrastructure improves, this could be a smarter bet than many initially expected.
Microsoft’s Bigger Gaming Play Keeps Expanding
This isn’t an isolated device drop. Microsoft has been reshaping its gaming vision for years—moving away from the idea that you need to own an Xbox console to be part of the ecosystem.
Between acquisitions like Activision Blizzard, the Xbox app on TVs, and its growing cloud gaming service, Microsoft’s gaming ambitions are sprawling.
The ROG Xbox Ally is just the latest step in what looks like a bigger play to redefine where, when, and how Xbox players game.
In many ways, this device is more than a console. It’s a flag in new territory.
