Microsoft’s next Xbox could look a lot less like a traditional console and more like a Windows gaming PC—at least according to a new report outlining the company’s evolving hardware strategy. The claim is that Microsoft is preparing a “PC in a TV-friendly shell” approach for its next-gen Xbox family, with a stronger focus on Windows, broader storefront support, and compatibility layers that help current Xbox games carry forward.

### A Windows-first Xbox strategy
The report suggests Microsoft wants to reduce the gap between Xbox and PC by building future Xbox hardware on a Windows foundation. That would make the Xbox ecosystem easier to maintain for Microsoft and could streamline development for studios, especially those already targeting Windows. It also points to a more flexible approach to software distribution—potentially including access to third-party PC storefronts like Steam and the Epic Games Store.

If that direction holds, it would be a major philosophical shift from the tightly controlled console model. Microsoft has already been nudging the market this way with its “Play Anywhere” messaging, Game Pass’ PC growth, and broader platform publishing. A Windows-forward Xbox could be the hardware expression of that strategy: fewer walls, more services, and a bigger emphasis on keeping players in the Microsoft ecosystem regardless of where they buy games.

### Handheld plans and “Project Kennan”
The same report reiterates that Microsoft is also exploring handheld hardware, including a rumored partner device sometimes referred to as “Project Kennan.” The pitch: an Xbox-branded handheld built by a PC manufacturer—Asus is named in the report—designed to feel like an Xbox product while running a Windows-based experience under the hood. If true, it aligns with Microsoft’s broader push to treat Xbox as a platform rather than a single box under the TV.

### Backward compatibility and what changes for players
One of the big questions is what happens to existing Xbox libraries. The report claims Microsoft is working on a compatibility layer to ensure current Xbox titles run on future hardware, even if that hardware is effectively a Windows PC. That would be crucial for maintaining trust in the Xbox ecosystem—especially after years of Microsoft positioning backward compatibility as a key value proposition.

From a player perspective, a Windows-based Xbox that supports multiple storefronts could be a game-changer: larger libraries, more frequent sales, and potentially fewer exclusivity lock-ins. But it also raises concerns about consistency and simplicity. Consoles win on plug-and-play reliability; the more “PC-like” Xbox becomes, the harder Microsoft will have to work to keep setup, performance, and updates frictionless.

The bigger picture is that Microsoft appears to be betting on services, cross-device access, and software scale over the traditional console cycle. If it can deliver the openness of PC gaming without sacrificing the ease of a console, the next Xbox could redefine what “console” even means—and force competitors to respond.

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