Microsoft is working on a partner gaming handheld with ASUS, set to launch later this year. Project "Kennan" is part of a wider effort at Microsoft to engage OEMs on Xbox-style gaming hardware.

I understand the Xbox work that has hit the headlines this week is actually called Project Kennan, not Keenan. I’m told that Kennan is the codename for a handheld that is being manufactured by Asus, and it’s part of a larger effort from Microsoft to unify Windows and Xbox towards a universal library of Xbox and PC games.

Microsoft's upcoming Xbox handheld will reportedly be made by Asus, and it aims to take on Steam Deck by delivering a new OS to bring "the best of Xbox and Windows."

Microsoft’s gaming chief Phil Spencer said that he wanted handheld gaming PCs to feel more like an Xbox. But as the saying goes, if you want something done right, do it yourself. Thus, Microsoft is reportedly working on its own handheld Xbox PC console.

According to a new report, Microsoft will partner will a gaming PC manufacturer on the first official Xbox handheld console this year.

Sources say that Asus and Microsoft are working together to build the first Xbox handheld gaming console for launch later this year.