the CEO of Microsoft Gaming, Phil Spencer, has revealed in a Bloomberg interview that Xbox handheld prototypes are currently being worked on. The caveat is that this hardware is still a few years out. So it would appear the rumors that Microsoft is working on an Xbox handheld are indeed true, but we sadly won’t see the results of this work for some time.
This isn’t technically Steam Deck news, but I think a major player like Microsoft making a Steam Deck competitor is pretty significant as far as the handheld PC market goes.
It would make more sense for microsoft to partner with some hardware vendor and release a modified version of windows 11. With a nice mobile-optimized GUI, integration for the most popular game stores and an optional desktop mode.