Microsoft Is Done Making Xbox Consoles

Xbox Ally: Not Quite a Console, but a Glimpse Into Microsoft's New Strategy

After months of speculation, Microsoft officially revealed the Xbox Ally on June 8, 2025. While it’s technically the company’s first portable "Xbox," the device challenges the very definition of what a console is—and signals a shift in Microsoft’s hardware strategy.

A Portable Xbox That’s Actually a Windows PC

According to a report from The Verge, the original vision for a true Xbox handheld was scrapped. What we have instead is the Xbox Ally—a Windows-based portable PC, designed and manufactured by Asus, not Microsoft itself. Under the hood, it runs standard PC hardware and is powered by a modified version of Windows, positioning it closer to a gaming laptop than a console.

This move highlights a new trend: Microsoft is likely outsourcing hardware production, then branding the result under the Xbox name. Rather than building consoles in-house, the company is opting to focus on the Xbox ecosystem itself—chiefly Game Pass and its growing PC games lineup.

Why Microsoft Is Moving Away from Traditional Consoles

Microsoft’s pivot away from self-built consoles doesn’t mean it’s abandoning gaming hardware altogether. Instead, the focus is shifting toward making Xbox more of a platform than a box.

By using Windows as the operating system, Microsoft can offer broader backward compatibility without the need for cumbersome "next-gen patches." It also helps them retain and grow the Game Pass subscriber base, as users gain access to Xbox content across a wider range of devices.

The Future: A Family of Xbox Devices

Looking ahead, The Verge anticipates a lineup of Xbox-branded devices with varying specs and prices—each designed to provide a unified gaming experience. Editor-in-chief Tom Warren suggests this is Microsoft’s way of standardizing the Xbox user interface and ecosystem across multiple hardware partners.

“I think this project gives Microsoft the ability to control the console experience and user interface on different hardware, to promote Game Pass, its Xbox PC titles, and much more,” says Warren.

This strategy could redefine what it means to be an Xbox player in the years ahead—not by tying gamers to a single box, but by bringing the Xbox experience to every screen.