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," targeting a late 2025 release. Simultaneously, a successor to the Xbox Series X and S is reportedly in full production, scheduled for launch two years later.

While Microsoft hasn't officially commented, its gaming executives have alluded to these devices in various interviews. In January, Jason Ronald, Microsoft's VP of 'Next Generation,' told The Verge about plans to integrate Xbox and Windows experiences for PC gaming handhelds produced by original equipment manufacturers (OEMs) like Asus, Lenovo, and Razer. Importantly, "Keenan" is distinct from a first-party Xbox handheld, which Microsoft's Phil Spencer has indicated is still years away.

The next-gen Xbox, reportedly greenlit by CEO Satya Nadella, is described as a premium successor to the Xbox Series X. This console, along with a first-party Xbox handheld and new controllers, is expected to complete Microsoft's 2027 console lineup. This suggests no direct next-gen successor to the Xbox Series S is planned, perhaps with the handheld filling that market segment.

Windows Central anticipates the next-gen Xbox will be more PC-like than previous iterations, supporting third-party storefronts such as 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 their next-generation hardware.

The future of consoles is a subject of much debate. The Xbox Series X and S are facing challenges in the market, and Sony has hinted at the PlayStation 5 entering its latter half of its lifecycle. While Nintendo is preparing to launch the Switch 2 later this year, concerns are growing about the traditional console market's viability.

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

This latest report indicates Microsoft's belief in the console's continued relevance.