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

Microsoft is reportedly working with a PC gaming OEM to develop its Xbox-branded gaming handheld, currently codenamed "Keenan."

There's been plenty of speculation on when Microsoft was going to enter the handheld gaming fray. The Xbox maker appears to have something in the works that may be further along than expected. Microsoft is working with an unknown manufacturer to make its own Xbox-branded gaming handheld,

Microsoft is said to be working on an Xbox handheld console slated for release in 2025, and a full next-gen console could be coming in 2027.

According to reports, Xbox is preparing a new handheld console in collaboration with well-known manufacturers in the industry. This new hardware would be launched later in 2025 and would run natively on Windows with improvements focused on gameplay.