Just a few days after Nintendo finally released its follow-up to the Switch, Microsoft has announced its own long-rumoured handheld console: the Xbox Ally. This is a very big deal, not just because it marks the first time Xbox has co-branded a console (with high-end PC specialists Republic of Gamers), but because it’s packing top-of-the-line hardware under its hood. I played the Xbox Ally X, one of two models coming before Christmas, a few hours after they were revealed during 8 June’s Xbox Showcase, and can easily see it becoming a serious competitor for both the Switch 2 and Valve’s Steam Deck.

The Xbox Ally springs from the coupling of four different tech firms: Windows, Xbox, AMD and Asus, and it’s definitely their golden child. Both the Xbox Ally and Ally X models have 7-inch 1080p touchscreens, with 16GB of RAM in the Ally and 24GB of RAM in the Ally X, and 512GB SSD storage and 1TB, respectively. Each has Ryzen Z2 chips, though Xbox Ally X has the AI Z2 chip, which integrates an AI processor directly into the silicon. As for what that actually means for players, Microsoft’s head of gaming devices, Roanne Sones, said during a presentation that players will be able to “take advantage of AI experiences without having to compromise anything on the GPU”. The devices both run Windows, but the team has modified it for optimal gaming.

“We’re not loading up the Windows desktop,” Xbox Experiences VP Jason Beaumont said. “We’re not loading up the icons and the task bar and components that really aren’t about playing video games … we can save a bunch of resources and then give those to the game, so that they can perform better.”

You can access your collection of games with a library button on the device (there’s also a new Xbox button that functions similarly to the one on a console controller). This library includes your PC games from Xbox and other stores, and will let you stream games from your existing Xbox console, if you own one. If you have an Xbox Game Pass subscription, hundreds of games are available to play on the Allies straight away.

View image in fullscreen ROG Xbox Ally X. Photograph: ROG

During Microsoft’s presentation in LA, I’m handed an Xbox Ally X over my right shoulder. I have rather small hands, and this thing is big (and heavier than the Switch 2), but it doesn’t feel overwhelming. As a gamer who prefers the ergonomics of an Xbox controller to a PlayStation DualSense, I appreciate the asymmetrical joysticks and how the outer curvature mimics the Xbox pad.

The Xbox Ally X boots up immediately into a homepage that shows your most recently played Xbox games, styled much like the console homepage. We’re told to navigate to Gears of War: Reloaded, a remaster of the 2006 classic that’s launching on 26 August. As a huge Gears fan, the effect of loading a beautifully remastered version of a game I haven’t played in nearly 20 years on a console held between my palms is pretty wild.

Muscle memory immediately kicks in: press A to magnet Marcus to a chest-high wall, reload your gun faster by timing a press of the R1 button – except I’m holding this game that shaped my teen years in my lap. I don’t get more than 10 minutes with Gears of War: Reloaded before the Xbox Ally X is somewhat unceremoniously plucked from my hands, and we’re shown a quick summary video with talking heads from Microsoft, Windows, ASUS and AMD. One of them says that the power and capabilities of the Xbox Ally X were “inconceivable even three years ago”.

There’s no price point yet, perhaps because the uncertainty of President Trump’s tariffs has Microsoft hesitant to name one at the moment. However, the look, feel, and function of the ROG Xbox Ally will make it a great option for those looking to access both Xbox and third-party games on a portable console, while the Xbox Ally X seems tailor-made for performance perfectionists.

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The price will be a huge factor: even the cheaper Ally console is likely to be more expensive than Nintendo’s new Switch 2. But as someone who doesn’t really play Nintendo games, and who only briefly had a Steam Deck before giving it to a friend, the ROG Xbox Ally is the first handheld I can see myself picking up and regularly playing.