Xbox is reportedly working on a new console with the working title Project Keenan that could potentially reshape Microsoft's gaming future.

According to a new report from Windows Central, Xbox will reportedly release a new gaming handheld as soon as this year.

Xbox next-gen console and handheld release dates leaked: what we know - The two gaming machines will finally reveal Microsoft’s grand plan to merge Xbox with Windows

There's been plenty of speculation on when Microsoft was going to enter the handheld gaming fray. The Xbox maker appears to have something in the works that may be further along than expected. Microsoft is working with an unknown manufacturer to make its own Xbox-branded gaming handheld,

A next-generation, full-size Xbox will take another two years, according to anonymous sources, but Microsoft's take on the handheld gaming PC could debut in the coming months.

It took a few years of dealing with poorly optimized handheld PCs, but Windows Central reports Microsoft may finally be working on an Xbox handheld. The company could announce an Xbox-branded portable device as early as this year,

Credit: Future and Microsoft Microsoft is prepping a new handheld version of its Xbox console that could be launched later this year. Meanwhile, plans are afoot to replace the existing Xbox Series S and X consoles in 2027.

It's being reported that Microsoft is making a gaming handheld with Xbox branding and similar to the Steam Deck. It's a great move.