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 expected 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 planned two years later.

While Microsoft hasn't officially commented, gaming executives have hinted at 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 produced by original equipment manufacturers (OEMs) like Asus, Lenovo, and Razer. Importantly, "Keenan" is distinct from a first-party Xbox handheld, which Microsoft gaming boss Phil Spencer has indicated is still years away.

The next-gen Xbox, reportedly greenlit by Microsoft 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, is expected to complete Microsoft's 2027 console offering. This suggests no direct successor to the less powerful Xbox Series S is planned, perhaps with the handheld filling that market segment.

Windows Central anticipates the next-gen Xbox will be more PC-like than previous iterations, supporting third-party storefronts such as Steam, the Epic Games Store, and GOG, alongside continued 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 a topic of much debate. The Xbox Series X and S are facing challenges in the market, and Sony has indicated the PlayStation 5 is nearing the midpoint of its lifecycle. While Nintendo is preparing the Switch 2, concerns exist about the traditional console market's viability.

Spencer has acknowledged the console market's stagnant growth, citing a large but unchanging customer base focused on a few major titles. Last year, former Xbox executive Peter Moore told IGN that Microsoft would have been considering the console's future.

This latest report suggests Microsoft's decision: the console lives on.