Microsoft has confirmed that its next-generation Xbox console is currently in development, even as the company expands into handheld gaming through its partnership with ASUS for the newly launched ROG Xbox Ally series. The company also said that it has plans to expand the Handheld Compatibility Program which means there could be other handheld consoles from other manufacturers running the Xbox interface.
In an interview with Variety, Xbox president Sarah Bond said that while the collaboration with ASUS has been met with an “overwhelming” response, it does not mark a shift away from traditional console hardware. “We are 100 per cent looking at making things in the future. We have our next-gen hardware in development. We’ve been looking at prototyping, designing,” Bond said, adding that Microsoft has partnered with AMD for the upcoming console platform.
Bond clarified that the ASUS partnership represents an expansion of Xbox’s ecosystem rather than a replacement for home consoles. “What we saw here was an opportunity to innovate in a new way and bring gamers another choice, in addition to our next-gen hardware,” she said. “We are always listening to what players and creators want. When there is demand for innovation, we’re going to build it.”
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According to Bond, Microsoft’s goal is to provide players with multiple hardware options depending on their gaming preferences. “We want to make sure there’s an option for the power players who want the latest innovations and want to push the edge of what’s possible. And then, if someone is looking for PC gaming on the go, there’s Xbox Ally for them,” she said.
She added that more innovation is planned across the Xbox hardware ecosystem, including improvements to the handheld experience, expansion of the Handheld Compatibility Program, and new performance-focused features.
While Bond did not reveal specifics about the upcoming console, a report from Tom’s Guide earlier this year suggested that the next-generation Xbox could resemble a user-upgradable, pre-built gaming PC. The console is reportedly powered by a new modular chip, codenamed “Magnus,” which may allow components like the CPU and GPU to be swapped or upgraded over time.
Additionally, Lenovo is also reportedly working on a new version of its Legion Go 2 handheld console which will offer the new Xbox full-screen experience (FSE), similar to ASUS ROG Xbox Ally and Ally X.

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