Xbox has stepped firmly into handheld gaming with the launch of the ROG Xbox Ally and ROG Xbox Ally X, which were developed in partnership with Asus. But instead of competing directly with Nintendo’s upcoming Switch 2, Microsoft has its sights set on Valve’s Steam Deck.
This move marks a significant step in Xbox’s “Play Anywhere” promise, as the company focuses on portable PC gaming rather than traditional console-style handhelds. With powerful hardware and a brand-new software experience, Xbox is ready to challenge the leaders in this space.
A new software experience to rival SteamOS
The most important feature in this new launch isn’t just the hardware—it’s the software. Microsoft has developed a new Xbox Experience for Handhelds, designed to simplify and optimise gaming on Windows-based portable systems. This new interface, explicitly built for handhelds like the ROG Xbox Ally, will offer a full-screen overlay with quick access to games and system controls.
You may already be familiar with Valve’s SteamOS, which powers the popular Steam Deck. It’s a lightweight system that focuses on games first, reducing background processes and boosting performance and battery life. Microsoft’s version aims to do the same—but with an even broader reach.
This new Xbox overlay will be exclusive to the ROG Xbox Ally and Ally X at launch. However, Microsoft has confirmed that by early 2026, it will expand to other handhelds like the Lenovo Legion Go, MSI Claw, etc. According to Roanne Sones, Xbox’s VP of gaming devices and ecosystem, “Similar full-screen Xbox experiences will be rolling out to other Windows handhelds, starting next year.”
This software will allow you to access your Xbox, Game Pass, Battle.net and Steam games all in one place. It will also include quick settings access and customisable widgets through the Game Bar with the press of a button. And since it still runs on Windows 11, you can continue using your favourite mods and third-party software.
Xbox is also working on a compatibility programme similar to Steam Deck Verified. Soon, you’ll see games marked as optimised for ROG Ally, MSI Claw, and more—helping you choose the best experience for your device.
Powerful hardware built for serious gaming
While the Nintendo Switch 2 is expected to be a big improvement over its predecessor, it will likely run modified versions of popular games like Cyberpunk 2077. The ROG Xbox Ally, however, will run the full PC versions right out of the box.
The Xbox Ally X has AMD’s latest Ryzen AI Z2 Extreme processor. This includes 8 CPU cores, 16 GPU cores, 16 threads, and a max boost of 5GHz. It uses Zen 5 and RDNA 3.5 technology, providing high performance in a small form factor. It supports up to 35 watts of power, giving it more muscle than most current handhelds.
During the recent Xbox Games Showcase, titles like Gears of War: Reloaded were demonstrated running at 60 FPS in 1080p on the Ally X. The MSI Claw A8, using the same chip, was shown running Lies of P at an impressive 100 FPS.
The ROG Xbox Ally’s base model features a Ryzen Z2 A chip with 4 CPU cores, 8 threads, and 20 watts of power—perfect for less demanding games like Hollow Knight: Silksong. While the Steam Deck can also play these games, it may not achieve the same settings or framerates due to its older Zen 2-based “Van Gogh” chip.
Pricing and availability
Although Microsoft and Asus haven’t revealed official prices yet, analysts expect the ROG Xbox Ally to start at around US$599, close to the Lenovo Legion Go S. The more powerful Ally X, depending on specifications, is expected to fall between US$799 and US$999.
That pricing places both Xbox handhelds above the expected US$449 for the Nintendo Switch 2 and more in line with the US$649 Steam Deck OLED. Of course, final prices could vary depending on regional taxes and tariffs.
Combining top-tier hardware and the new Xbox Experience software could give Microsoft a real advantage in the PC handheld gaming space despite the higher price. While Nintendo focuses on its unique titles and audience, Xbox wants to create the ultimate portable gaming PC platform.
In the end, this new generation of Xbox handhelds may not directly challenge the Switch 2, but it’s clear Microsoft is gearing up to shake Valve’s grip on PC handheld gaming.
