In an era where handheld gaming is experiencing a resurgence, thanks to devices like the Steam Deck, Microsoft’s absence in this space is increasingly conspicuous. Despite the clamor from fans for a portable Xbox, the tech giant has remained focused on a different path: cloud gaming. But why?

The Cloud-Centric Approach

Microsoft has long been a proponent of device-agnostic gaming, allowing Xbox players to stream games to a variety of devices, including phones and tablets. The company’s Xbox Game Pass subscription service has been a key part of this strategy, opening up the Xbox ecosystem to potentially billions of iOS and Android users. While this approach has its merits, it’s not without its drawbacks.

The Limitations of Cloud Gaming on Mobile

Cloud gaming on a phone is far from an ideal experience. Issues such as incoming calls, lack of Wi-Fi, and notifications can disrupt gameplay. Microsoft’s Surface Duo has been optimized for cloud gaming, but even that device has room for improvement.

The Prototype That Never Saw the Light of Day

Sources close to Microsoft have revealed that the company had been working on a cloud-focused Xbox handheld. This device would have featured a lightweight version of the Xbox user interface, designed to run on handheld devices, dedicated cloud consoles, and TVs. However, this project was eventually scrapped, as Microsoft shifted its focus towards TV streaming apps.

Regulatory Hurdles

Microsoft’s cloud gaming ambitions have not gone unnoticed by regulators. The company’s proposed acquisition of Activision Blizzard has been under scrutiny, with regulatory bodies expressing concerns about Microsoft’s growing influence in the cloud gaming sector. This scrutiny has likely played a role in slowing down the development of Xbox Cloud Gaming.

The Windows Dilemma

While Microsoft may not be entering the handheld gaming market anytime soon, the company is well-positioned to create a Windows-powered Steam Deck rival. However, the user experience on Windows handhelds leaves much to be desired. The operating system, primarily designed for desktops, doesn’t translate well to smaller, touch-based devices.

The Road Ahead

With the handheld gaming market poised for growth, Microsoft cannot afford to sit on the sidelines. While an Xbox handheld may not be in the cards, the company has the opportunity to enhance the user experience on Windows-powered handhelds. This could pave the way for a new generation of devices that offer an Xbox-like experience, filling the void left by the absence of a dedicated Xbox handheld.

Final Thoughts

Microsoft’s decision to forgo a dedicated Xbox handheld may be a calculated move, but it’s one that leaves many questions unanswered. As the handheld gaming market continues to evolve, it will be interesting to see how Microsoft chooses to participate—or not—in this growing sector.