A new report reveals Microsoft's ambitious video game hardware plans: a next-generation Xbox console slated for 2027 and an Xbox-branded handheld gaming device arriving later in 2025.

Windows Central reported on a partner PC gaming handheld, codenamed "Keenan," expected in late 2025, and a next-generation Xbox Series console, currently in full production, launching two years later. While Microsoft hasn't officially commented, executives have alluded to both devices. In January, Jason Ronald, Microsoft's VP of Next Generation, told The Verge about plans to integrate Xbox and Windows experiences in PC gaming handhelds from OEMs (Asus, Lenovo, Razer, etc.). Importantly, "Keenan" is distinct from a first-party Xbox handheld, which Phil Spencer, Microsoft's gaming boss, has indicated is still years away.

The next-gen Xbox, reportedly greenlit by CEO Satya Nadella, is positioned as a premium successor to the Xbox Series X. This console, alongside a first-party Xbox handheld and new controllers, will complete Microsoft's 2027 console offering. Notably, there's no mention of a direct successor to the Xbox Series S, perhaps suggesting the handheld will fill that market segment.

Windows Central anticipates this next-gen Xbox will be more PC-like than previous iterations, supporting third-party storefronts like Steam, the Epic Games Store, and GOG, while maintaining backwards compatibility.

Last year, Xbox president Sarah Bond emphasized Microsoft's commitment to "delivering the biggest technological leap ever in a generation" with its next-generation hardware.

The future of consoles is undeniably uncertain. The Xbox Series X and S face challenges in the console market, and Sony hints at the PlayStation 5 nearing the latter half of its lifecycle. While Nintendo prepares for the Switch 2 launch later this year, concerns remain about the traditional console market's viability.

Spencer has acknowledged the lack of significant console market growth in recent years, citing a large but stagnant customer base focused on a few major games. Last year, former Xbox executive Peter Moore even suggested Microsoft internally debated the console's future.

This latest report indicates Microsoft's belief in the continued relevance of consoles, at least for the foreseeable future.