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 arriving 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 for two years later.

While Microsoft hasn't officially commented, its gaming executives have alluded to these devices in past interviews. In January, Jason Ronald, Microsoft's VP of 'Next Generation,' told The Verge about plans to integrate Xbox and Windows experiences in PC gaming handhelds produced by OEMs (original equipment manufacturers) like Asus, Lenovo, and Razer. It's important to note that "Keenan" is distinct from a first-party Xbox handheld, which Microsoft's Phil Spencer previously indicated was still years away.

The next-gen Xbox, reportedly greenlit by 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, will complete Microsoft's 2027 console offering. The report suggests no direct successor to the Xbox Series S is planned, perhaps indicating the handheld will fill 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, while maintaining 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 subject of much debate. The Xbox Series X and S are facing challenges in the market, and Sony has hinted that the PlayStation 5 is nearing the midpoint of its lifecycle. With Nintendo's Switch 2 expected later this year, concerns are rising about the traditional console market's viability.

Spencer has acknowledged the lack of significant growth in the console market in recent years, citing a large but stagnant user base focused on a limited number of blockbuster titles. Last year, former Xbox executive Peter Moore told IGN that Microsoft would have been considering the future of consoles.

This latest report suggests Microsoft's answer is a resounding "yes."