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, with a launch expected two years later.

While Microsoft hasn't officially commented, its gaming 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 into PC gaming handhelds developed 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 further off.

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, will reportedly complete Microsoft's 2027 console offering. This suggests no direct successor to the Xbox Series S is planned, possibly positioning the handheld to fill that market segment.

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

Last year, Xbox president Sarah Bond stated Microsoft was "moving full speed ahead on our next generation hardware, focused on delivering the biggest technological leap ever in a generation."

The future of consoles is highly debated. The Xbox Series X and S are facing challenges in the market, and Sony has hinted at the PlayStation 5 entering its later lifecycle. While Nintendo plans a Switch 2 launch this year, concerns remain about the traditional console market's viability.

Spencer has acknowledged the console market's stagnant growth, noting a large but unchanging customer base focused on a few major titles. Last year, former Xbox executive Peter Moore told IGN that Microsoft would likely be considering the console's future. This latest report suggests Microsoft has decided consoles still have a place.