Earlier reports indicated the project was frozen — primarily due to AMD's strict sales volume requirements. However, the development of a portable Xbox remains on Microsoft's list of goals as a response to the growing popularity of Steam Deck and similar devices.
According to Windows Central, the main focus of engineers is now on the next-generation stationary console. It has become the company's main hardware priority. Rumors suggest it will be a powerful, possibly hybrid device with a price of around $1000. Its release is optimistically scheduled for 2027, which is why the portable Xbox has been postponed.
Microsoft wants to ensure the success of the main platform before entering into direct competition with Sony, which is also rumored to be working on a portable system. If the stationary Xbox is released in 2027, Microsoft's proprietary portable console should not be expected until 2028 or later. The company believes that the additional time will allow for improved energy efficiency and the implementation of more advanced memory technologies, which is important for AAA games.