Xbox Handheld Rumored Canceled Over AMD’s Massive Order Demands

Rumors have been swirling across the gaming community that Microsoft’s long-anticipated Xbox handheld console has been quietly canceled – and the reason might have less to do with vision and more with business math. According to known AMD leaker Kepler L2 on the NeoGAF forums, the project was reportedly shelved after AMD demanded a minimum order of over 10 million units to justify developing a custom SoC (system-on-chip) for the device. For context, the Steam Deck has sold roughly five million units globally, while ASUS’ ROG Ally barely broke two million.

Faced with these numbers, Microsoft apparently decided that betting big on a niche product wasn’t worth the financial gamble.

While Kepler L2’s track record on AMD-related leaks has been strong, it’s still wise to treat this as speculation. The Xbox handheld was never publicly confirmed, and Microsoft has remained silent on any such plans. Officially, the company continues to emphasize its commitment to gaming hardware, stating on October 5, 2025: “We are actively investing in our future first-party consoles and devices designed, engineered and built by Xbox.” That statement aligns with reports of Microsoft working closely with AMD on upcoming hardware – possibly hinting at a pivot rather than a full cancellation.

There’s also a broader strategy shift at play. Microsoft’s gaming division has increasingly leaned into ecosystem growth, cross-platform services, and Game Pass expansion rather than competing directly with Sony or Nintendo on hardware sales alone. A handheld would have required massive investment, marketing, and ongoing production at a time when portable PC gaming is already crowded. Even with Microsoft’s deep pockets, committing to a 10-million-unit baseline might have seemed excessive for a device that could struggle to reach profitability.

Interestingly, the ROG Ally – now rebranded as the “ROG Xbox Ally” under a co-marketing push – appears to be Microsoft’s indirect answer to the handheld trend. It’s already selling out ahead of its October 16 launch, proving there’s real appetite for portable Xbox experiences. Whether this means we’ll never see a true “Xbox Portable” remains unclear, but one thing is certain: the handheld dream isn’t entirely dead – it’s just evolving.