The Xbox system is a windows based system optimised to run on the consoles hardware. It has been since launch. Modifying it for handhelds with the ability to navigate to a desktop environment. The addition of a desktop environment isn’t so difficult that it should take three years to accomplish. They launched windows 11 4 years ago and it didn’t take but a few months for them to start shoehorning AI into every crevice of it.

Asus has a product already in production that could be used for the purposes of test bench testing and development. The original ROG Ally is even around the same price point as a steam deck.

So all in all the only two excuses MS has are that they are bad at understanding trends and getting in on the ground floor, and they are bad at optimising windows specifically because that goes against their business plan to gather user data and weaponize that data against their competitors.

All.in all we don’t have an Xbox handheld at this point because they’re greedy and fail to act on trend analysis.