This isn’t quite what we expected to see last year, but the ROG Xbox Ally still marks a new chapter in the rapidly developing “handheld war.”

Two "ROG Xbox Ally" models made in a partnership with Taiwan-based ASUS will be available by the year-end holiday season, Xbox president Sarah Bond said during an online event showcasing games heading for the platform. "The Xbox Ally is an Xbox you can hold in your hands, bringing together the power of Xbox and the freedom of Windows," Bond said.

Microsoft has needed to respond to SteamOS ever since the Steam Deck launched three years ago, and it has steadily been tweaking its Xbox app and the Xbox Game Bar on Windows to make both more handheld-friendly. But there was always a bigger overhaul of Windows required, and we’re starting to see parts of that today.