Internal Microsoft documents obtained by multiple outlets reveal that the company is actively prototyping a dedicated Xbox handheld gaming device. Codenamed "Keystone 2," the device is described as a native Xbox console in a portable form factor — not a cloud-streaming device like the original Keystone concept.
What the Documents Reveal
The documents, dated March 2026, outline a device powered by a custom AMD APU capable of running Xbox Series S games natively at 1080p. The handheld reportedly features 16GB of RAM, a 7-inch 120Hz display, and full support for Xbox Game Pass. Microsoft has not commented on the leak.
"A native Xbox handheld has been the most requested hardware feature from the community since Series X|S launched."
Timeline and Pricing
The documents suggest a target release window of holiday 2027 with a price point under $500. The device would sit alongside the existing Series S and Series X, not replace them. A formal announcement could come as early as next year's E3.