It has been claimed that Xbox’s now dedicated handheld was cancelled because AMD required a minimum of 10 million units in its contract. It’s a number that, at face value, would have been almost impossible to hit, with the highly successful Steam Deck selling around four million units at the time of writing, but according to the reputable leaker, that was the number AMD wanted.
UPDATE: According to Windows Central’s Jez Corden, KeplerL2’s claim “isn’t even slightly true”.
The news comes from reputable AMD and hardware leaker KeplerL2, who has reported on many AMD-related leaks in the past. According to Kepler, Xbox’s dedicated handheld was cancelled because AMD wanted a massive 10 million unit commitment for a dedicated System-on-a-Chip (SoC).
It was said that with “Steam Deck only selling ~5 million units and ASUS ROG/Lenovo Legion only selling 1-2 million,” and Microsoft “didn’t want to take that risk.”
If true, it’s not surprising that Microsoft didn’t want to make a $10 million chip commitment in the current unprecedented times, but it’s always unfortunate to hear of hardware cancellations.
Kepler did mention further down in the forum thread that the handheld was “quite early in development” though, so at least this wasn’t a project that was cancelled just before it was due to go on sale.
This weekend, Xbox and Microsoft were hit by a series of reports and claims that Xbox was abandoning its hardware entirely and that a new round of layoffs was set to hit the company in Q1 2026. On the hardware side, though, Microsoft responded to the rumours yesterday, stating that it’s “actively investing in our future first-party consoles and devices designed“.
What do you think of Microsoft saying no to AMD on its 10-million chip commitment and cancelling its Xbox handheld? Do you think we’ll still see a first-party handheld from Xbox in the future?
Leave your thoughts down in the comments below, and join the official Insider Gaming Discord server.
For more Insider Gaming, read about Microsoft removing DLC and add-on discounts for Xbox Game Pass subscribers. And make sure you subscribe to the Insider Gaming Newsletter.
Tom Henderson is Insider Gaming's Co-Founder and Editor-In-Chief. When he's not running one of the industry's leading independent video game websites, he's probably playing an FPS like Call of Duty,…
More from Tom Henderson
I think they could have made it work.
Had they designed the chips to work in both the hand held and console space 10 million isn’t that crazy.
They already have Tiers for their consoles so the bottom 2 tiers could use the same chip the hand held does. Then the Top Tier Xbox could use a better APU or something a bit more powerful.
It wouldn’t be to crazy, I’d aggressively negotiate the price at that point if we’re doing 10 mil they’re going to compromise on the price if Microsoft is going to compromise on the build.
So who actually fumbled here? AMD for asking a 10 million unit commitment, or Xbox for balking when the pitch was basically “help us build a Switch-style Xbox handheld”? Switch is at 153.10 million sold, Switch 2 already 5.82 million. Steam Deck sits around ~5 million, ASUS ROG and Lenovo Legion in the 1–2 million lane. Microsoft looked at those PC handheld numbers and said the risk was too high.
The thing is, Microsoft and Sony are the only brands with enough pull to challenge Nintendo in a portable: first-party output, third-party leverage, hardware standards, publishing, advertising, built in player base, the whole stack. A 10 million floor is not wild in silicon land if you want pricing and priority. Saying no reads less like prudence and more like a lack of faith in their own console base.
For non-PC gamers, Steam and Asus are relative unknowns. Nintendo moved units on brand reliability and portability, not raw specs, and people knowingly traded power and library breadth for that form factor. If Xbox won’t swing at that pitch, maybe consoles are further into stagnation than anyone wants to admit.