Rumor: Microsoft Canceled First-Party Xbox Handheld Because AMD Wanted 10 Million Units

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According to a recent leak, Microsoft scrapped plans for its own Xbox handheld device because AMD reportedly demanded a commitment to produce 10 million units. Although console hardware sales are currently down, Microsoft continues to compete in the console space while also prioritizing its software and service offerings. While Xbox did partner with ASUS to create a handheld, they previously considered developing one entirely on their own.

The partnership between Microsoft and ASUS had a rough beginning with delays and pricing issues, but the handheld device is now showing positive signs. The ROG Xbox Ally X quickly sold out at several retailers within a day of becoming available, even though it costs $1,000. While current sales are promising, a recent leak indicates that AMD initially hoped for much stronger demand before fully committing to developing a dedicated Xbox handheld console.

AMD Reportedly Wanted 10 Million Units to Make SoCs for a First-Party Xbox Handheld

According to reliable hardware leaker KeplerL2, Xbox’s canceled handheld project was ultimately scrapped because AMD required a guaranteed order of at least 10 million units before they would produce the system’s core components. Initially, many believed Microsoft abandoned the handheld to focus more on software and partnerships. However, KeplerL2’s recent comments indicate that AMD’s demand for a large production volume – more than Xbox was willing to commit to – was the main reason the project was canceled.

As a fan, I found it really interesting to hear that AMD apparently needed to sell 10 million Xbox consoles to make a custom chip worthwhile. I get why they’d want to be sure they’d sell enough to cover the development costs, but looking back, that seemed like a big ask! By early 2025, the Steam Deck had sold around 3.7 to 4 million units, which was less than half of AMD’s target in the same timeframe. While older handhelds like the PlayStation Vita managed 12 million sales in three years, it’s clear modern portable PCs haven’t been reaching those numbers, making that 10 million unit goal feel pretty ambitious.

Although Microsoft reportedly discontinued plans for a portable Xbox device, they haven’t given up on creating their own gaming hardware. Despite recent rumors, Microsoft confirms it’s still developing the next generation of Xbox consoles.

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2025-10-06 17:05