Microsoft has finally announced the Xbox Ally X, after months of speculation that it was working on some kind of handheld gaming PC. What makes this handheld especially interesting is that Microsoft is tuning up its software to make Windows more usable with a controller, even having the OS launch straight into a refined Xbox App.

If that sounds familiar, it’s because the Steam Deck works in a very similar way. Valve tuned its handheld to run on a specialized version of Linux, and the device boots straight into what’s essentially a handheld version of Steam Big Picture mode. If Microsoft is able to pull it off, this could be the moment Windows handhelds have been waiting for.

We’ll have to wait a bit longer to see just how well the Xbox Ally X holds its own against the Steam Deck, but we already know a bunch about the new handheld. So how do the two compare so far?

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Xbox Ally X vs. Steam Deck: Specs

Both the Xbox Ally X and the Steam Deck are built on AMD APUs that were specifically made for handheld gaming PCs. However, with three years seperating the devices, a lot has changed.

The Steam Deck came out before the Z1 Extreme that powered the first wave of mainstream Windows handhelds like the ROG Ally. But the chip is similar in a lot of ways. It’s an APU with a 4-core, 8-thread Zen 2 CPU, which is paired with an 8-core RDNA 2 GPU. While this chipset can do a lot, especially in the lower-specced indie games that thrive on the handheld, it is getting up there in age. After all, Zen 2 launched in 2019 with the Ryzen 9 3900X, and RDNA 2 in 2020 with the Radeon RX 6800 XT.

The Steam Deck processor actually looks a lot like the non-X Xbox Ally, which has AMD’s new ‘Z2 A’ APU. Despite that new name, however, it very closely matches the Steam Deck’s specs.

ROG Xbox Ally X – Images View 7 Images

The other Microsoft handheld takes things to another level though. The Xbox Ally X is powered by the AMD AI Z2 Extreme. This APU is nearly identical to the Z2 Extreme that AMD announced at CES 2025, just with an NPU (Neural Processing Unit) stapled onto it. Beyond the AI capabilities though, it’s still an 8-core, 16-thread Zen 5 CPU, paired with an RDNA 3.5 GPU with 16 cores. If the RDNA 3.5 architecture name looks weird to you, you’re definitely not alone. But all you need to know is that it’s basically the same as the RDNA 3 architecture that powered the Radeon 7000 series of graphics cards, but with some optimizations for low-power APUs.

Not only does the Xbox Ally X have literally double the CPU and GPU cores of the Steam Deck, but it’s using much newer silicon. I won’t know exactly how the new handheld performs until I get it in the lab, but I can already tell you that it’s going to be much faster.

Winner: Xbox Ally X

Xbox Ally X vs. Steam Deck: Display

As much as I love a high-resolution screen, Valve really did make a great choice by using an 800p display for the Steam Deck. By keeping the resolution down, more games are able to run well on the Steam Deck without having to tweak with settings too much. Yeah, 800p is arguably low-res in 2025, but that doesn’t stop the Steam Deck OLED from looking incredible, especially in games like Hades.

The Xbox Ally X is taking a different approach with its 1080p 120Hz LCD display. Not only does it have a higher resolution, but it’s also faster than even the 90Hz Steam Deck OLED, which is huge for games that can actually run that fast on a handheld.

The debate between fast screens and pretty screens is nothing new, so really it depends on what you’re looking for. I’m a firm believer that even a lower-res OLED display looks better than a high-res LCD screen, but if you’re purely after response times, the Xbox Ally X is going to be better.

Winner: It depends.

Xbox Ally X vs. Steam Deck: Game Compatibility

Looking back on it, it’s kind of incredible that the Steam Deck was able to play so many games out of the gate, despite running on Linux. This was thanks in large part to Valve’s Proton translation layer, which essentially allows the device to emulate Windows. It’s not a perfect solution, but it did give the Steam Deck access to a ton of Windows games that it wouldn’t otherwise have access to. But it was largely locked to Steam.

You absolutely could install Windows 11 on the Steam Deck and get it running the Xbox app and other launchers, but it was a massive to-do that most people didn’t want to, uh, do. The Xbox Ally X, however, doesn’t need a translation layer to run games.

The big advantage of Microsoft co-developing a handheld is that it’s running Windows. Microsoft is modifying it a bit to make it easier to use on a handheld, but the guts are still the same, which means pretty much any PC game will work on the new device. So while Steam has an undeniably huge library, being able to access any game that runs on Windows automatically gives the win to the Xbox Ally X.

Winner: Xbox Ally X

Xbox Ally X vs. Steam Deck: Price

Beyond a vague “Holiday 2025” release window, I have no idea when the Xbox Ally X will be coming out, let alone how much the thing will cost. However, it is probably going to be a bit more expensive than the Steam Deck. The Asus ROG Ally X – which launched with very similar specs but with the last-gen equivalent APU – ran for $799 at launch. Given that everything is getting more expensive this year, I would at least not expect it to be cheaper.

We know exactly how much the Steam Deck costs, though. You can get a base-model Steam Deck starting at $399. That’ll get you a handheld with a 256GB SSD and an LCD display. You can up that cost to $549 for the OLED version with a 512GB SSD and a slightly bigger battery. Or, you can go all out for $649 to upgrade to a 1TB SSD.

Because Microsoft can subsidize its hardware a bit, I could see the Xbox Ally X launching for the same price as 1TB Steam Deck OLED, but not for much less. And you’d be missing out on the gorgeous OLED display.

(Likely) Winner: Steam Deck

The Winner (for Now): Xbox Ally X

So much of what will truly make the Xbox Ally X better than the Steam Deck is kind of in limbo right now, but at least one thing is for certain: It’ll be more powerful. Plus, running Windows will give it easier access to basically any PC game ever. Really, the thing I’m waiting to see is how much Microsoft can actually improve the Windows 11 experience on a handheld. If the company can even bring it close to the same ease-of-use enjoyed by the Steam Deck, it’ll be a huge win for the Xbox handheld.

The price is likely going to be the pain point for most people. Microsoft hasn’t revealed how much either of its new handhelds are going to cost, but there’s a reason the Steam Deck has remained so popular, even if it looks a little long in the tooth compared to expensive devices like the Lenovo Legion Go and the Asus ROG Ally X.

For now, things are looking good for the Xbox Ally X. We’re just going to have to wait and see how it does in the lab to make a definitive call in this handheld cage match.

Jackie Thomas is the Hardware and Buying Guides Editor at IGN and the PC components queen. You can follow her @Jackiecobra