ASUS just teased the new "Xbox handheld," which is actually a Windows-powered PC similar to the existing ROG Ally.

Today ASUS dropped an interesting teaser trailer for a new device. Based on the footage, there's only one thing it could be: Some sort of handheld. Both Xbox and ASUS aren't being too enigmatic, either: Based on the recent leaks about Project Kennan, a lot of people are expecting an Xbox handheld of some kind. It's not exactly a surprise.
The footage also reflects this by flashing some not-so-subtle Xbox ABXY controller face buttons on the new ROG Ally's screen. The Xbox socials also responded to ASUS on Twitter with a perfect meme. The new Xbox-branded ROG Ally should be revealed soon with tons of info about what to expect from the handheld (and likely with the semi-disappointing realization that it's not a native Xbox handheld, but a native Windows handheld instead).
Project Kennan was the codename for this particular third-party handheld, which is being made with a separate OEM partner and not manufactured or produced by Microsoft themselves. Remember that Microsoft sells (and has sold) every Xbox console at a loss, so it's not eager to get into making even more hardware.
It's possible that Project Kennan will also utilize a new-and-improved version of Windows, potentially one made for handhelds, with an accompanying Xbox app design for game optimization, sharing, and launching.
The handheld PC market is expected to grow to 8 million throughout 2025, driven by stronger adoption and a wider array of products available to consumers.