Microsoft Sets Sights on Valve with Xbox's New Handheld Consoles

Microsoft has unveiled its first Xbox co-branded 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 announced. The Xbox Ally is positioned as a 'great value' all-around device, while the Xbox Ally X is marketed as an 'ultimate high-performance' handheld for more demanding gamers, similar to Asus' existing ROG Ally and Ally X handhelds. Both models utilize AMD processors and run on Windows 11, featuring Xbox-branded buttons, a gaming-focused interface, and an aggregated library that combines players' software from various PC storefronts and the Xbox Game Pass subscription library. In addition to playing PC games natively, the handhelds can stream console libraries using Xbox Cloud Gaming and Remote Play. The interface is designed to be familiar to Xbox console owners, with an 'Xbox full screen experience' that optimizes the devices for gameplay functionality by deferring non-essential tasks and dedicating more resources to gaming. The contoured grips are inspired by Xbox's wireless controllers, and accessibility features from Xbox and Windows are also included. Each handheld has a dedicated Xbox button for instant access to the Game Bar and seamless switching between apps and games. The launch territories for the Xbox Ally and Ally X 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 other territories to follow. Microsoft's messaging indicates that the company is targeting players who value having their game libraries accessible across devices. For those with both a PC and Xbox console, plus a Game Pass subscription, the seamless syncing of save data between devices is a significant advantage. The inclusion of Windows 11 is crucial, as it allows for a more versatile gaming experience, with access to games not available elsewhere, and the freedom to enjoy PC gaming directly from the Xbox experience. This approach seems to be directly aimed at Valve, as the Steam Deck, which popularized the current wave of PC handhelds, uses the Linux-based SteamOS and is less flexible when it comes to installing and running games from other storefronts. Microsoft is offering a more comprehensive device out of the box, catering to both PC players and its existing console audience with the Xbox branding. On the surface, the Xbox Ally and Ally X appear to be new versions of the ROG Ally with an Xbox button, but the opportunity for Xbox lies in positioning itself between specialist PC handhelds like the Steam Deck and Nintendo's mass-market Switch. The PC gaming handheld space is still relatively new, and having two devices with different specs mirrors Microsoft's strategy with the Xbox Series S and X. According to Ampere Analysis' Piers Harding-Rolls, this partnership demonstrates Microsoft's commitment to the PC gaming market and its intent to protect and expand Windows as the dominant gaming platform. Harding-Rolls believes that teaming up with Asus allows Xbox to leverage the company's trust with PC gamers, accelerate its entry into the market, and counter Valve's influence. The key factor to consider is pricing, as the cheapest Steam Deck model retails for $399, and Asus has not produced a handheld at that price point. If priced reasonably, Xbox could attract both its existing console players and PC users drawn to a Windows handheld tailored for games. However, with home console prices increasing, the Xbox Ally X is unlikely to be cheap. Nevertheless, this announcement has made the handheld gaming market more interesting, especially with the launch of the Switch 2, and it's exciting to see Xbox taking on a different challenge with its new hardware.