The Future of Gaming: Handheld Consoles Take Center Stage

Following recent confirmations of Microsoft's handheld Xbox device, Sony is now reportedly developing a new portable console, marking its return to the handheld market after the discontinuation of the PS Vita. The upcoming launch of a Nintendo Switch successor and the growing popularity of PC handheld gaming, driven by the Steam Deck, have sparked speculation about a potential golden age for handheld gaming. Both Sony and Microsoft are in the early stages of planning their handheld devices, waiting for technological advancements to catch up with their ambitions. Sony aims to create a device capable of playing PS5 games, while Microsoft likely seeks to develop a handheld Xbox that can run Xbox Series S games. Achieving these goals will be challenging due to the use of PC-like x86 CPUs and AMD GPUs in consoles, whereas recent mobile device advancements have focused on ARM architectures. However, with the Steam Deck already utilizing a scaled-down version of the RDNA architecture, it is likely that AMD will eventually develop PS5-class hardware for mobile devices. Once this technology becomes available, battery life may become a concern, and both companies will need to carefully define the use cases for these devices. From a commercial perspective, the business case for these handheld devices is not entirely clear. Initially, it was assumed that Microsoft and Sony would focus on thin-client devices tied to their game streaming services, but the current approach involves powerful handheld devices that can play games natively. This shift may be a response to the declining enthusiasm for 5G and the realization that cloud streaming will not dominate the gaming industry in the near future. The success of the Steam Deck has also played a significant role in this decision, as it has shown that there is a market for handheld PC gaming devices. For Microsoft, the threat posed by the Steam Deck is more direct, as it has enabled Valve to establish Steam as a capable gaming OS, potentially competing with Microsoft's Xbox platform. Sony and Microsoft have different motivations for entering the handheld market, but they share a common goal of expanding their gaming platforms. They also face similar technological challenges, relying on AMD to develop portable versions of the RDNA architecture. The resulting devices will likely be similar, but they will mark a significant comeback for the handheld form factor, which was previously written off. The handheld console market is set to become the next major battleground for the gaming industry's platform holders.