Microsoft's Xbox boss says the rumoured gaming device is years away from release but that it is now an 'expectation,' not a hope.

It's official. Microsoft has changed its stance from "we should have" to "we're planning" on the Xbox handheld gaming console. What's the catch? It's still years away.

Phil Spencer, the Xbox head honcho, told Bloomberg on February 2 that "the expectation was that we would do anything" in regards to a handheld gaming system. Bloomberg reports that Microsoft is developing prototypes and researching market demand, but Spencer has said that a retail device will be a few more years away.

"Longer-term, I love building devices," Spencer told Bloomberg. "And I think our team could be doing some real innovative work. But we want to learn and be informed by what's going on now."

Spencer said in June that he was a fan of the space created by Steam Deck, ROG, and his Legion Go. Spencer said in March that he wanted his Lenovo Legion Go to "feel like an Xbox."

While this latest statement does not guarantee that Microsoft will release a gaming phone, it is clear that the Xbox chief has been mulling over the idea for some years and sees an opportunity in the market.

Beyond that, there are very few specifics. Microsoft would have a lot of hardware options if it launched in a few years. AMD has just launched its latest Strix Point APU, which is now being used in PC-based portables.

One of the disappointments with this chip is that it is based on TSMC’s N4 silicon technology rather than the most recent N3 technology. This limits the performance which can be crammed in small form factors.

In a few short years, the Xbox handheld could be based on TSMC's node N2 or N3 technology. Then, performance will increase dramatically and battery life may even improve.

Microsoft can also use AMD to power the device. Despite Intel's struggles the Battlemage iGPU included in its latest Lunar Lake APU laptop is impressive. Intel CEO Pat Gelsinger also said that he believes the future of graphics will be "large" integrated graphics cards rather than standalone graphics. Intel could be a good option for Microsoft.

Microsoft could also use Nvidia to build the handheld. According to the latest rumours, Nvidia will release a gaming APU in 2025 or 2026. Nvidia's APU is expected to have Arm CPU cores instead of x86 ones, which will cause problems with backwards compatibility.

There's no denying the power of Nvidia's graphic technology, and the leakage of Microsoft's Xbox internal roadmap last year revealed that the company was also evaluating a move to Arm from x86 on the main console.

Nvidia and Arm are both possibilities, especially when you take into account the power efficiency that Arm CPUs have. This is a great feature for a portable.

This latest statement by Spencer, when taken as a whole, means that a handheld will not be available before 2026. We'd bet on 2027 or later, given how early Microsoft appears to be in the process.

The device will be more powerful if it arrives later. In this case, a longer wait may be worth it. Watch this space.