In a new episode of The Xbox Two Podcast, co-host Jez Corden said that he has been informed that Microsoft is working on Xbox handhelds in some capacity right now. Corden went on to stress that just because this hardware is being created, it doesn't mean that it will ever be released to the public. Beyond this, it was said that such a platform would be a dedicated device, and seemingly wouldn't be hardware designed for cloud streaming only.
"I know that they've got handheld prototypes right now," Corden said in the podcast. "Prototypes don't necessarily mean they're going to market. But I think you really have to look at the landscape and Microsoft's strategy and the thought process and the new chips that are starting to enable these types of devices. I think Microsoft would be absolutely insane to not do this."
As Corden himself mentions, the handheld space has absolutely blown up in recent years. Not only is Nintendo dominating the market with the Nintendo Switch, but Valve's Steam Deck has also been hugely popular since its debut. Sony seems to have also taken note of this burgeoning desire for handhelds and this past year released the PlayStation Portal, which is an accessory that works in tandem with the PS5. Given how many major corporations are developing handhelds of their own, it would be incredibly logical for Xbox to come about with its own hardware before long.
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Source: https://comicbook.com/gaming/news/xbox-handheld-microsoft-report/
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