Microsoft has a new ‘Ally’ in its battle with Sony PlayStation: Will the gamble pay off?

Xbox vs PlayStation

Microsoft has made a dramatic move in the ongoing battle against PlayStation. The company recently revealed a pair of handheld devices—the ROG Xbox Ally and Ally X—that are meant to bring the Xbox ecosystem directly into players’ hands. But this step also highlights a deep crossroads for Microsoft: is this a forward-thinking expansion of its gaming platform, or a last-ditch effort to keep its Xbox brand alive and relevant?

A dramatic shift in strategy

Instead of designing its own proprietary handheld, Microsoft teamed up with Asus to produce a powerful Windows-powered gaming handheld. The ROG Xbox Ally, featuring AMD processors and a high-resolution 7-inch display, lets gamers access their Xbox libraries alongside PC platforms like Steam and Epic.

This signals a dramatic departure from Microsoft’s traditional closed ecosystem. It shows a move toward letting players enjoy their games across different devices and storefronts, not just on a single piece of hardware.

Bridging two worlds

The handheld runs a custom Windows UI, and not to be too dramatic, the Xbox Windows app on full screen that lets players navigate their game libraries much like a traditional console. Players can connect their accounts and seamlessly transition from a large TV to a small, handheld form, adding a layer of flexibility previously unavailable in the Xbox ecosystem.

This approach underscores Microsoft’s future strategy: it wants to be a service, not just a piece of hardware. Whether you’re on a phone, a PC, or a specialised handheld, you’re meant to be within the Xbox ecosystem.

The competition from PlayStation

Meanwhile, PlayStation sticks to a more traditional path. The PS5 dominates the home console market, and its ecosystem is closed and curated. The PS Portal, a lightweight handheld designed to stream PS5 titles over a local network, highlights this closed approach.

This highlights a key contrast. Microsoft is trying to broaden its reach through a more flexible ecosystem.

Sony is not new to handheld consoles

Handhelds aren’t a new venture for the industry. Sony was a trailblazer in this space nearly 20 years ago with the launch of the PlayStation Portable (PSP) in 2004 and later the PlayStation Vita in 2011. The PSP challenged Nintendo’s domination of handheld gaming by offering a powerful, multimedia-centric experience on a small device. It was a unique blend of a game console and a media centre — a first for its time — and it paved the way for future innovations in handheld technology.

The PS Vita followed in the PSP’s footsteps with enhanced controls, a touchscreen, and graphical prowess that was close to home consoles. Although it didn’t match the success of the Nintendo DS or 3DS, the PS Vita demonstrated that there was a market for high-fidelity gaming on a small, portable form.

Today, Microsoft’s venture into handhelds highlights a key shift — instead of designing proprietary hardware from scratch, it is using a hybrid approach. It lets players connect to their ecosystem through a powerful Windows-based handheld, reflecting a more flexible, service-centric future.

A future move or a last-ditch effort?

It appears that Microsoft’s move is a forward-thinking expansion, reflecting a future where platforms matter more than hardware. Others view it as a desperate attempt to stay relevant against a dominant PS5 and growing PC market.

The danger for Microsoft lies in whether gamers will embrace this hybrid approach. Will players appreciate having a handheld that plays both PC and Xbox titles, or will the lack of a closed ecosystem undermine its appeal?