Phil Spencer, CEO of Microsoft Gaming, hinted at Microsoft Corp. ( MSFT )'s potential entry into the handheld gaming market with an official Xbox handheld device, although he refrained from confirming its existence outright.

In his discussion with Polygon, Spencer delved into his observations of current PC gaming handhelds and outlined his ambitions for boosting features to better match Xbox standards.

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"I want my Lenovo Legion Go to feel like an Xbox," Spencer said.

He stressed how crucial it is for all games and associated save files to seamlessly integrate and went on to elaborate on his vision, expressing his desire for a full-screen Xbox app in a compact mode, complete with the entire social ecosystem characteristic of Xbox.

"I want to be able to boot into the Xbox app in a full screen, but in a compact mode. And all of my social [experience] is there. Like I want it to feel like the dash of my Xbox when I turn on the television. [Except I want it] on those devices," the Xbox boss said.

Moreover, Spencer disclosed the Xbox hardware team, led by Roanne Sones, was exploring "different hardware form factors and things that [they] could go do" as part of their strategy for future Xbox hardware.

He added: "What should we build that will find new players? That will allow people to play at times when they couldn't go play [in the past]?"

While Spencer did not explicitly confirm the existence of an Xbox handheld, he underscored the significance of merging hardware and software innovations: "I think it's important," Spencer assured. "Look at the real inflection points in our industry, look at the Wii. It was hardware innovation that was linked with great software innovation."

It's worth noting that last year leaked court documents from Microsoft ( MSFT )'s legal battle against the FTC for Activision Blizzard's acquisition unveiled plans for an Xbox handheld. However, Spencer later claimed they were "outdated."

Furthermore, in February, during a podcast featuring Microsoft ( MSFT )'s Xbox executives Spencer, Sarah Bond and Matt Booty, the company hinted at significant advancements in their future hardware trajectory.

They teased it as "the largest technical leap you will have ever seen in a hardware generation." Bond highlighted the importance of this hardware, describing it as "the flagship, seminal experience of Xbox" and a "developer target" for performance.

She further teased that new Xbox hardware can be anticipated in the fourth quarter, stating, "There's some exciting stuff coming out in hardware that we're going to share this holiday."

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