Microsoft Gaming CEO Phil Spencer has confirmed the company has its sights set on a handheld gaming device under the Xbox brand. He did temper expectations, saying the device is still "a few years out" from release.

In an interview with Bloomberg, Spencer mentioned Microsoft Corp. (NASDAQ:MSFT) is already working with prototypes, exploring what an Xbox handheld could bring to the market. “The expectation is that we would do something,” he said.

Xbox's Handheld Goals: Playable Anywhere, Anytime

Spencer has been hinting at Xbox's handheld ambitions for some time. In a conversation with IGN in June, he showed enthusiasm for new form factors and the "different ways to play" that an Xbox handheld could offer. "The future for us in hardware is pretty awesome," he continued.

See Also: Xbox Handheld Incoming? ‘We Should Have One Too,’ Says Xbox Chief Phil Spencer

While the development process continues, Microsoft is working on improvements to the Xbox app to enhance the experience for gamers on existing handhelds, such as the Steam Deck.

According to Spencer, this is a short-term goal that aligns with Xbox's broader vision of making games accessible wherever players are. "Longer term, I love us building devices," he said, adding the hardware team is capable of doing "some real innovative work" in the space.

Spencer also pointed out the importance of local gameplay, suggesting that a future Xbox handheld might combine downloadable play with cloud capabilities. "I think being able to play games locally is really important."

This isn't Microsoft's first consideration of a handheld device. Documents leaked last fall hinted at a potential Xbox handheld.

Although Spencer later noted those documents were outdated, they showed the company has long considered the idea. In the meantime, the Xbox team has been studying the successes of devices such as Nintendo Switch and Steam Deck.

Expanding Xbox’s Reach: Games On PlayStation And Nintendo

Beyond hardware, Spencer hinted Xbox games might appear on Sony Group Corp.’s (NYSE:SONY) PlayStation and Nintendo ADR (OTC:NTDOY) consoles in the future. “I do not see sort of red lines in our portfolio that say ‘thou must not,'” Spencer said. Xbox has already taken steps in this direction, with recent games like Pentiment, Hi-Fi Rush, Grounded and Sea of Thieves appearing across Nintendo and PlayStation.

Spencer also touched on future plans for the Halo series, which is now being developed in the cross-platform-friendly Unreal Engine. This shift may open up possibilities for broader availability of Microsoft's flagship title.

Meanwhile, Spencer confirmed Xbox's interest in acquiring more studios, particularly in regions like Asia, where Xbox is looking to grow its presence. He acknowledged another acquisition on the scale of Activision Blizzard ($68.7 billion) isn't likely in the immediate future

“The business is performing right now, and I think that means a more healthy future for hardware and the games we build,” he said.

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