Like most industries, the gaming business is driven by trends and cycles. There is rarely anything truly new in the world; More often than not, we see old ideas come back into fashion on the rise of the wheel, even as current trends peak and begin their downward journey.
Portable gaming is on the rise right now. Handheld devices, more or less relegated to the dustbin of history with the advent of the smartphone, have been revived by the success of the Switch – and now it seems like everyone wants a piece of the action.
Sony is reportedly working on a comeback to the handheld marketand the peculiar PlayStation Portal device perhaps serves as a gentle touch on the water. Microsoft has teamed up with Asus to co-brand new ROG Ally Xbox gaming handhelds, part of the trendy new PC gaming handheld category kicked off by Valve's famous Steam Deck.
In the midst of all this we also saw report – while unconfirmed and deserving of a huge pinch of salt given how much dubious information circulated in the hardware market in the best of times – that Microsoft was working on the first Xbox handheld was quietly abandoned when it couldn't take on the order volume for chip maker AMD to move forward.
Given the seeming enthusiasm for handheld devices in general, especially after the Switch 2 surpassed the sales curve of its hugely successful predecessor, this seems odd. It's easy to see how this could be seen as an internal vote of no confidence in the Xbox hardware more broadly; With laptops all the rage, why wouldn't Microsoft think it could sell the 10 million units AMD (reportedly) wanted it to sell?
The truth is, even if Microsoft's console business is firing on all cylinders right now (which it clearly isn't), the handheld market is an incredibly difficult market, and always has been.
We don't know what the status of Microsoft's ongoing negotiations with AMD might be, other than knowing they are still happeningas the partnership is critical to any future hardware ambitions of the company. We certainly don't know if the chipmaker has a “You have to be this tall to drive” mark for custom components set at 10 million units. However, we can say with confidence that 10 million units of a portable device is an incredibly high price – for any company, at any time.
The one exception to this rule is Nintendo, a company that has built its business on the handheld market to varying degrees for the better part of four decades. For any other company, the portable gaming sector is a minefield at best and a graveyard at worst. (Thanks, I realize how dirty a cemetery crossed by a minefield would be. I said what I said.)
Take the PlayStation Vita, Sony's second foray into handhelds after the generally well-received PlayStation Portable. Sure, the company made various mistakes with the Vita, but by all accounts the device itself was fantastic—beautifully designed, surprisingly powerful, and with a gorgeous screen. It sold 14 million units before it was discontinued – at a time when Sony's home console business was in full swing.
At least the Vita is remembered with some fondness, but in those basic install numbers it's only a neck ahead of the disastrous Wii U. Its predecessor, of course, did much better – the PSP shipped over 75 million units by the end of its life – but the fact that Sony failed to create a decently performing portable even as the PS4 dominated living rooms still stands. It took two generations of Nintendo completely clearing out Sony's home market with devices that looked like the PS Vita's grown-up cousin for the company to even consider returning to that space – and it remains to be seen how willing it is to make a serious commitment on that front.
Microsoft's passion for gaming laptops also deserves some attention, as the level of excitement and activity in this area does not seem to match sales and consumer interest. Asus and other manufacturers have released a variety of products to compete with Valve's Steam Deck, but the hype they generate in the media seems to be disproportionate to how many consumers actually buy these things.
In the end, even the device that inspired them was not a commercial success. The Steam Deck is a wonderful device and a favorite among the relatively small number of users who own it. A huge credit to Valve is that it seems to have figured out how to carve out a niche in the handheld market where it doesn't require huge hardware sales to be successful; in particular, the chipset in the original Steam Deck models was reported to have been repurposed from a custom APU created for the ill-fated Magic Leap AR glasses, which apparently helped avoid any 10 million unit order requirements.
Rather than having to sell tens of millions of units, the boost that Steam Deck provides to the Steam platform as a whole easily justifies its existence, especially since Steam Deck owners are reportedly some of the platform's most loyal and big-spending consumers. This is for the best; By some accounts, the Steam Deck has had all-time sales of less than 5 million, and the Switch 2 has reportedly overtaken it in its first week on the market.
In other words, when you get down to it, there's actually no one who sells tens of millions of units of any handheld device that isn't called “Switch.” Steam Deck is a valuable and thriving niche, but a niche nonetheless. Sony's latest effort in this area barely outsold the Wii U, and what it's currently working on remains unseen and unconfirmed. As for the rest, I'd be shocked if the combined sales of all non-Steam Deck handhelds approached a million units between them.
Even with all this in mind, interest in portable gaming is very real – the rise is happening – it's just not entirely clear who, besides Nintendo, will be able to grab onto the rising wheel.
For Microsoft, whose strategy is to create more and better ways for people to interact with Game Pass, working with hardware partners to improve the portable PC experience makes a lot of sense. However, creating a dedicated handheld Xbox with a commitment to sell at least ten million units would be pure arrogant madness. Like a lot of people, I'm interested to see what Microsoft will actually do with its console hardware strategy going forward, but entering the portable minefield before it even manages to get a straight line into home consoles wouldn't be the smartest move.
