TLDR
- Microsoft integrates Windows and Xbox for cross-device gaming.
- New ROG Xbox Ally handheld consoles built with ASUS launch at $599 and $999.
- Move challenges Valve’s Steam Deck and Sony’s PlayStation Portable.
- Strategy aims to boost Game Pass subscriptions and cloud gaming growth.
- Microsoft plans a unified gaming experience across all screens.
Microsoft Corporation (NASDAQ: MSFT) stock rose 1.08% to $523.23 during midday trading as the company unveiled major steps toward uniting its Windows and Xbox platforms.
Microsoft Corporation, MSFT
The move marks a pivotal point in Microsoft’s gaming evolution, signaling its goal to let players enjoy seamless gaming across all devices.
The tech giant has partnered with PC manufacturer ASUS to develop its ROG Xbox Ally handheld console line. The base model is priced at $599, while the high-performance Ally X retails for $999. Both models feature 7-inch displays and can run PC games natively or stream via the cloud or Xbox consoles.
A Shift in Microsoft’s Gaming Strategy
This launch represents a significant shift in Microsoft’s gaming strategy, which traditionally revolved around home consoles and PC gaming. The new handhelds position Microsoft directly against Valve’s Steam Deck, priced between $399 and $649. Sony’s $199 PlayStation Portable and Nintendo’s $449 Switch 2 also compete in this growing space, but neither offers third-party store connectivity like the Ally.
Xbox President Sarah Bond and Microsoft’s Windows and Devices President Pavan Davuluri emphasized the company’s vision to align both platforms. “Windows is the No. 1 platform for AAA gaming,” Bond said, noting that the integration will unlock untapped opportunities for gamers worldwide. Davuluri added that the handheld initiative provided “an opportunity to rethink what Xbox and Windows can be together.”
Integration Powers Long-Term Growth
Industry experts see this strategy as a natural advantage for Microsoft, given its control over both gaming and operating systems. “There are inherent advantages to integrating the OS with the storefront and game experience across screens,” said analyst Lewis Ward.
Bringing Xbox closer to Windows is expected to drive Game Pass growth. The subscription service, priced between $9.99 and $29.99 per month, offers access to Microsoft’s entire gaming library across console, PC, and cloud. The company hopes to replicate the recurring revenue success seen in its enterprise offerings.
Building the Future of Play
Microsoft’s long-term plan focuses on expanding gaming beyond individual devices. Bond explained that the company aims to make Windows the “home for gaming” across all platforms, TVs, PCs, laptops, and smartphones.
By strengthening its partnership with AMD for the next-generation Xbox, Microsoft is setting the stage for a fully integrated gaming ecosystem that could redefine entertainment accessibility worldwide.
Performance Overview: MSFT
As of October 22, 2025, Microsoft’s trailing total returns show strong outperformance versus the S&P 500. MSFT gained 24.82% year-to-date and 23.31% over the past year, compared to the S&P 500’s 14.00% and 14.60%, respectively. Over five years, Microsoft’s 153.94% return far outpaces the benchmark’s 94.16%.
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