Can Microsoft Challenge Nintendo With Its New Xbox Handhelds?

Microsoft (MSFT) is finally taking the handheld gaming space seriously after it announced a new portable gaming PC collaboration with Asus. This will have it release two devices in this market: the ROG Xbox Ally and ROG Xbox Ally X. The release date for these mobile Xbox devices hasn’t been revealed, but Microsoft said they will hit the market in “Holiday 2025.”

The ROG Xbox Ally will feature Advanced Micro Devices’ (AMD) Ryzen Z2 A processor, 16GB of RAM, a 512GB SSD, and a 60Wh battery. The ROG Xbox Ally X is the more powerful version, with a Ryzen AI Z2 Extreme APU, 24GB of RAM, a 1TB SSD, and an 80Wh battery.

It’s unclear how much Microsoft intends to charge for the ROG Xbox Ally devices, but it could come with a hefty price tag. The ROG Ally X 7, which is comparable to the ROG Xbox Ally X, goes for $899.99. Additionally, Microsoft could run into user issues, as some might expect the device to play their entire Xbox library. Instead, it’s limited to “Play Anywhere” titles, but users can buy games from other PC storefronts, such as Steam.

Will Xbox Challenge Nintendo’s Handheld Dominance?

Nintendo (NTDOF) has been the leader of the handheld gaming sector for years thanks to the strong sales of its DS, 3DS, and Switch devices. It extended this iron grip with the launch of the Switch 2 last week. While the ROG Xbox Ally X blows the Switch 2 out of the water in terms of performance, it’s unlikely to dethrone it due to price concerns.

With an estimated price of $900 for the ROG Xbox Ally X, and $800 for the ROG Xbox Ally, these options will have a hard time competing against Nintendo’s $450 price tag for the Switch 2. They also won’t have access to the same library of exclusive Nintendo games on the Switch 2, but will benefit from the larger PC game market.

MSFT vs. NTDOF: Which Is the Better Stock?

Turning to the TipRanks comparison tool, traders can see which of these two stocks analysts prefer. Microsoft has the better consensus rating at Strong Buy, compared to Nintendo’s Moderate Buy. However, the average upside potential for them is comparable, with MSFT at 9.47% and NTDOF at 10.4%.

See more MSFT and NTDOF stock comparisons