Xbox is planning a new handheld for holiday 2027 — not a refresh of the Asus-made Xbox Ally X, but a next-generation device built under Project Helix. The timeline comes from a Fortune profile of Xbox CEO Asha Sharma, published Monday, and confirms what’s been simmering in internal Microsoft discussions for months: a dedicated gaming handheld remains on the roadmap, despite unresolved friction between Xbox and Windows teams over its operating system.
That tension is real, active, and high-stakes. According to people briefed on the clash, a senior Xbox executive threatened to cancel the entire handheld project rather than accept a Windows Home–based OS. Xbox now controls the OS direction for the device, though Sharma stressed collaboration remains essential: “We can’t build Helix on our own.” The current Ally X runs a heavily modified Windows layer, functional, but widely criticized for sluggishness and poor game optimization compared to Steam Deck’s Linux-based SteamOS.
That shortcoming isn’t theoretical. It’s baked into the hardware’s daily performance. If Xbox wins the OS fight, the 2027 device could finally deliver what the Ally X promised but didn’t fully achieve: a Windows-adjacent, Xbox-first portable experience. No pricing, specs, or exact launch date have been confirmed.
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