When rumours of a handheld Xbox console first started doing the rounds a while ago, it became apparent that Microsoft was not only working with Asus on a 'partner' device (now known as ROG Xbox Ally), but also on its own first-party handheld similar to existing home consoles. Once development on the two started ramping up, Microsoft opted to go all-in on the partner device and "sideline" its internal efforts - something Xbox President Sarah Bond has explained a little bit more.
In a new chat with outlet Variety, the Xbox exec further detailed why it decided to stick with just partnering with Asus on a handheld for the time being, as opposed to working on both devices. Bond said "we could do partnered much quicker, and in a much more innovative way" than Microsoft working by itself - likely due to Asus's experience in the market and its existing ROG Ally product line.
"[We made ROG Xbox Ally] to really begin to transform the experience and take it to that next level in a way that we could do partnered much quicker, and in a much more innovative way, than we could [individually] with what we were each doing,"
The speed reasoning makes sense to us; it would have taken Xbox much longer to bring its own dedicated handheld to market - with significant R&D costs, manufacturing logistics, shipping details and all the rest of it to figure out. Asus already had a bunch of that in place, alongside a base to build from in its existing ROG Ally devices. As for the innovation side of things, we're not so sure.
Of course, it's also a very tough market to navigate right now - which explains both the cost of the ROG Xbox Ally systems, and Microsoft's continued price increases for Xbox Series X|S. We'll have to wait and see what happens with next-gen and whether things will calm down a bit by then, but it's no doubt a risk to develop and release a massive product into the market right now - and we'd wager that factored into Xbox's decision too.