While there's been talk about Microsoft slowing down its gaming business and exiting the console market, with many thinking the tech giant has given up on making Xbox consoles entirely, it seems like that could be further from the truth.

According to Windows Central's Executive Editor, Jez Corden, Microsoft is reportedly working on an Xbox-branded gaming handheld, expected to roll out later this year. And while this isn’t entirely surprising, from what we know so far, the device itself already sounds like a game-changer.

Microsoft's Xbox hardware is in for an exciting few years

Jez Corden mentions that Microsoft is working with an existing PC gaming OEM on the handheld, codenamed "Keenan." While he doesn’t seem to know the exact brand they're collaborating with, he name-dropped a few possibilities, including ASUS, Razer, and Lenovo.

Despite that, the handheld is expected to look just like you'd expect any Xbox device to, reportedly featuring an official Xbox guide button alongside Xbox design sensibilities. He also notes that he expects Keenan to be more PC-oriented and "definitely running full Windows." This isn't surprising at all, since Microsoft stated that combining Xbox and Windows is the key to handhelds earlier this year.

Of course, that means the Microsoft Store and PC Game Pass aren't going anywhere, and users will also have the option to install applications like Steam. Microsoft's Gaming CEO, Phil Spencer, confirmed last year that the tech giant was actively working on a gaming handheld, though they didn’t expect to launch it anytime soon, saying it was still a "few years out."

While there's little doubt that an Xbox-branded handheld is on the way, the early release date seems suspicious, to say the least. It may be because Microsoft isn't developing the handheld alone and that it's a partner device, potentially allowing for a release later this year. Still, it's best to take this with a grain of salt, as the report itself states the handheld will only arrive this year "if plans are met."

The report also states that Microsoft has several console developments in the pipeline. The company is reportedly working on the Xbox Series X's premium successor, alongside "its own Xbox gaming handheld and several new controller options," which are allegedly set to launch in 2027.