Xbox Takes Aim at Valve with New Handheld Consoles

Microsoft has unveiled its first co-branded Xbox handheld consoles, the ROG Xbox Ally and Ally X, developed in collaboration with Asus. These devices are set to launch during the 2025 holiday season, with pricing details yet to be disclosed. The Xbox Ally is positioned as a versatile, value-driven device, while the Xbox Ally X is marketed as a high-performance handheld catering to more demanding gamers. Both models utilize AMD processors and run on Windows 11, offering Xbox-branded buttons, a gaming-centric interface, and an aggregated library feature that consolidates players' software from various PC storefronts and the Xbox Game Pass subscription library. In addition to native PC game playback, the handhelds can stream console libraries via Xbox Cloud Gaming and Remote Play. The interface is designed to be familiar to Xbox console owners, with an optimized "Xbox full screen experience" that prioritizes gameplay functionality. The contoured grips are inspired by Xbox's wireless controllers, and accessibility features from Xbox and Windows are also integrated. Xbox Play Anywhere, allowing a single game purchase to function across PC, console, and cloud gaming, is also supported on these devices. Each handheld features a dedicated Xbox button for instant access to the Game Bar and seamless switching between apps and games. The initial launch territories include Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Korea, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Saudi Arabia, Singapore, Spain, Sweden, Switzerland, Thailand, Turkey, the United Arab Emirates, the United Kingdom, and the United States, with additional territories to follow. Microsoft's strategy with the ROG Xbox Ally and Ally X appears to target players seeking a unified gaming experience across devices. For those with both a PC and Xbox console, plus a Game Pass subscription, the seamless synchronization of save data between devices is a significant advantage. The inclusion of Windows 11 is a key factor, as it enables access to a broader range of games and PC gaming freedom, directly competing with Valve's offerings. The Steam Deck, a pioneering PC handheld, uses the Linux-based SteamOS and excels at running games from the Steam library. However, it lacks flexibility in installing and running games from other storefronts without modification. Microsoft sees an opportunity to provide a more versatile device that appeals to both PC players and its existing console audience, leveraging the Xbox brand. On the surface, the partnership between Microsoft and Asus may seem like a simple rebranding of the ROG Ally with an Xbox button. However, the potential for Xbox lies in positioning itself between the niche PC handheld market, dominated by devices like the Steam Deck, and the mass-market appeal of Nintendo's Switch. With two devices offering different specifications, Microsoft mirrors its strategy with the Xbox Series S and X, a approach not yet taken by Nintendo or Sony in their handheld launches. According to Piers Harding-Rolls of Ampere Analysis, this partnership demonstrates Microsoft's growing commitment to the PC gaming market and its intention to strengthen Windows as the dominant gaming platform. By collaborating with Asus, Xbox can leverage the company's trust among PC gamers, accelerate its market entry, deepen integration with Windows and Xbox services, and counter Valve's influence in the handheld market. As of 2024, Windows PC handhelds have sold 1.2 million units, with the cheapest Steam Deck model retailing at $399. Asus has not released a handheld at this price point, with the original ROG Ally launching at $600 before price adjustments. If priced competitively, Xbox could attract both its console player base and PC users drawn to a Windows-based gaming handheld. However, with rising home console prices and the Xbox Ally X's impressive specs and capabilities, it is unlikely to be cheap. The launch of the Switch 2 and the introduction of Xbox's new hardware have transformed the handheld gaming market into a more intriguing landscape. As the PS5 dominates the home console market, Xbox's decision to pursue a different strategy with its new handhelds is a welcome development.