Rumor mill: Potentially explosive rumors surrounding the future of Xbox have invited plenty of volatile speculation recently, some regarding Microsoft's near-future software plans and others concerning the next hardware cycle. While some seem more likely than others, a generous dose of salt is recommended until Microsoft makes official announcements.

Sources have told the Xbox News Cast podcast that Microsoft plans to enter the next hardware cycle with a traditional console and a dockable handheld variant similar to the Nintendo Switch. Speaking on this week's episode, "MAGG" also supports previous rumors indicating the next generation of Xbox could launch in 2026.

The development of the new hardware would be headed not by Xbox console lead designer Jason Ronald but by the Surface team. The Surface family comprises a number of well-regarded laptops, tablets, and ultrabooks, so tasking the lineup's developers with a handheld Xbox wouldn't be an enormous leap.

The device would not only stream games over Xbox Cloud Gaming, similar to Sony's PlayStation Portal, but also run them locally. Compared to the standard console, the handheld would use optimized performance profiles similar to the Xbox Series S.

The podcast's report is similar to one from Moore's Law is Dead regarding Sony's next-gen plans. Sources recently told the YouTuber that the PlayStation 6 could also receive a handheld companion. The device's SoC would feature 18 CUs, enabling digital backward compatibility with all PlayStation 4 games, though compatibility with PlayStation 5 titles is unclear.

We're listening and we hear you. We've been planning a business update event for next week, where we look forward to sharing more details with you about our vision for the future of Xbox. Stay tuned.

– Phil Spencer (@XboxP3) February 5, 2024

Releasing a handheld would be an unexpected move into new territory for Microsoft and an ambitious retry for Sony. While nothing is certain until official announcements come, the success of devices like the Nintendo Switch and Steam Deck likely has Microsoft and Sony at least considering whether they can emulate Nintendo in whole or in part.

Meanwhile, recent reports that Microsoft plans to release some of its exclusive games on PlayStation 5 and Switch have started a firestorm among fans. Following last month's signs indicating Hi-Fi Rush and Sea of Thieves could reach non-Xbox consoles, new rumors suggest that the upcoming Indiana Jones and the Great Circle might only remain exclusive to Xbox for a short period before coming to PlayStation 5.

Responding to the rising gossip, which included speculation on whether Microsoft plans to remain in the game console arena, Xbox boss Phil Spencer confirmed that the company will reveal details of its plans next week. Given the nature of these rumors, it's best not to assume anything until then.