Microsoft is starting to see the value and appeal of gaming handhelds, and might even be cooking up a device of its own. One of the benefits to Microsoft making a gaming handheld would undoubtedly be the effect it has on the other PC gaming handhelds on the market. Many of the handhelds currently available run Windows — with the Steam Deck as the notable exception — and that comes with compromises. Whether we see an Xbox handheld or not, Microsoft is already trying to improve the gaming handheld experience by optimizing the Xbox app and Windows for that form factor. After testing out an upcoming Xbox app update via the Xbox Insiders program, I'm convinced the changes to Compact Mode are a step in the right direction, but there's still a long way to go.

What's new with Compact Mode

You'll be able navigate the Xbox app easier with a controller

Let's start by going over the new features coming to Compact Mode in the Xbox app. For now, these features are only available for Xbox Insiders enrolled in the PC Gaming Preview. There isn't an official release date for the new Compact Mode, but anyone can try it by signing up in the Xbox Insider Hub app. Microsoft first added Compact Mode to the Xbox app in November 2023, trying to create a view better optimized for gaming handhelds. Before you can see the new look, be sure that the Compact Mode toggle is flipped in the main Xbox app menu.

The most notable newcomer to the Compact Mode view available for Xbox Insiders is a feature called Jump back in. The whole point of Compact Mode is to make navigating the Xbox app with a controller easier, and Jump back in makes the process of launching games a whole lot simpler. Nine recently-played games appear on the main Xbox app page, and they can be started up with the built-in controller on your gaming handheld. Similarly, Microsoft redesigned the Friends panel in the Xbox app to make it easier to navigate from the sidebar. It now works the same way as the Notifications panel in the sidebar, and is simpler to navigate as a result.

'Jump back in' is the big addition

You can see up to nine recently-played apps on the Xbox app homepage

If you're an avid fan of gaming handhelds, Jump back in might sound a lot like a fan-favorite Steam Deck feature. SteamOS can do a "quick resume" of sorts after a Steam Deck is locked, allowing you to jump right back into the game when it is unlocked. There are some similarities between Jump back in and this SteamOS feature, but they are far from equal. That's not to say one is necessarily better than the other — the two software features aim to do different things. While SteamOS is better at placing you back into a game after a Steam Deck has been idling or put to sleep, the Xbox's app Jump back in feature is really good at multitasking. It shows up to nine recently-played games on the Xbox app homepage, and starting one up is quick and easy.

You can navigate the list of apps shown in the Jump back in list with your controller, and pressing the menu button will start the game immediately via the context menu. Clicking the game normally will open up the game hub for that title. It might sound strange that Jump back in doesn't immediately start up the game, but that's actually by design. By opening up the game hub instead, you're able to see if the game needs an update or if your friends are playing before you start. After the game hub is opened, you just need to press Play to "jump in." During every step of the way, users can navigate through the Xbox app with their controller with no issues.

The Jump back in feature really stands out when trying to switch between multiple running apps. The Xbox app knows when there is already an instance of a game running in the background, and that makes switching between titles easy. Simply pressing the menu button on your gaming handheld after hovering over the game will instantly launch you into the currently-running instance of the game. After using the updated Compact Mode in the Xbox app, it's clear that Jump back in is the easiest way to switch between running games on a Windows-based gaming handheld.

It's still not as good as Amoury Crate

Microsoft can forget about the Xbox app rivaling SteamOS — for now

There's a catch that seriously limits the usefulness of Jump back in, however. It only shows games downloaded from the Xbox app or Microsoft Store, so any games you purchased from Steam or a third party won't appear. This firmly makes this feature positioned for Xbox PC Game Pass users that play a lot of games included with their Game Pass Ultimate subscription. For those users, Jump back in will make it possible to quickly navigate recently-played titles from the PC Game Pass library. For everyone else, the native UI that comes with your gaming handheld is probably better than the Xbox app's new Compact Mode.

I'm an Asus ROG Ally user, and that means I have Asus' Armoury Crate app. Compared to the updated Compact Mode view in the Xbox app, I think Armoury Crate is better. SteamOS is probably better, too. Being able to see all the games installed on your handheld — regardless of whether they came from — is essential functionality for a game launcher. The Xbox app has a chance to become the best way to launch games on gaming handhelds, but it'll need to look beyond Xbox and the Microsoft Store before that happens.