The Next Frontier: Handheld Consoles as the Future of Gaming

Just a week or two following the announcement that Microsoft is developing a handheld Xbox device, we now have reports indicating that Sony is likely in the initial stages of creating a new portable device – its first venture into this sector since the withdrawal of the unsuccessful PS Vita five years ago.

With a successor to the Nintendo Swap on the horizon and the rising popularity of PC handheld devices bolstered by the Steam Deck’s triumph, it’s fair to speculate whether we are about to enter a new golden era for handheld gaming – a segment that many dismissed entirely when mobile games surged in popularity in the 2010s.

The caveat here is that both Sony and Microsoft are at the very nascent stages of conceptualizing their handheld products, and to some extent both firms seem to be waiting for technology to align with their aspirations.

Sony desires its device to be capable of playing PS5 titles, and it’s reasonable to assume that Microsoft would similarly want any handheld Xbox to work in conjunction with the Xbox Series S regarding game compatibility.

These are technologically challenging requirements, particularly because these consoles utilize PC-like x86 CPUs and AMD GPUs, while much of the innovation that has enabled mobile devices to become significantly faster and more energy-efficient in recent years has centered on ARM architectures.

However, it’s conceivable that we will eventually reach a point where AMD integrates PS5-class hardware into a mobile form factor. The path is somewhat apparent, given that the Steam Deck already operates on a scaled-down version of the RDNA architecture that powers both the PS5 and Xbox Series consoles, yet it will take time to achieve this.

Even if we do reach this threshold, battery life is likely to be an issue – the Steam Deck is not particularly outstanding in this regard to begin with – and both companies will need to be very cautious and clear in defining the use cases for these devices due to the potential constraints that may arise.

From a technological standpoint, these devices are undoubtedly feasible – albeit several years away, and with some caveats and considerations that may still need to be addressed. Commercially, however, what is the industry rationale here precisely?

There is a more straightforward commercial motivation for Microsoft and Sony to pursue this route; both of them face a significant competitor using handheld devices to gain the upper hand.

For some time, it was thought that if Microsoft and Sony were to re-enter the handheld market, they would do so with thin-client devices linked to their game streaming services – a notion bolstered when Sony introduced the PlayStation Portal, a device designed precisely for this purpose, although primarily intended for use within the home, tethered to a PS5, rather than as a genuinely portable console.

What is now being discussed is quite different; powerful handheld devices capable of playing titles from the PlayStation and Xbox libraries natively, instead of merely streaming them from the Cloud.

This shift likely stems from the cooling of enthusiasm surrounding 5G, which had unrealistically been seen as a catalyst for a streaming-oriented model for game consumption.

Cloud streaming is gradually establishing itself in a distinct niche – a very unique area of interest, though limited – and shows no signs of overtaking traditionally-run games as the industry’s predominant model anytime soon, which is not surprising considering how quickly advancements in local processing and storage tend to outpace the comparatively modest gains in network speeds and costs.

In the longer term, this trend would inevitably redirect focus back to the potential of powerful handhelds rather than thin clients. In the shorter term, however, there is a more straightforward commercial incentive for Microsoft and Sony to navigate this path; both have a formidable competitor leveraging handheld devices to gain an advantage.

It is often popular to suggest that Sony does not truly compete with Nintendo. There is some logic to this perspective, not solely due to the realm of capabilities of Nintendo’s brands and product line-up but also because historically Nintendo has often thrived as a “second console,” a device that consumers would purchase alongside their PlayStation or Xbox to access Nintendo’s unique offerings.

This notion has often been somewhat exaggerated despite the kernel of truth at its core, and in recent generations, it has been increasingly apparent that this is no longer the case – the Switch has become the primary, and often the sole, gaming device for many consumers. This is particularly true in Sony’s home territory.