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A pipeline of high quality, broad interest games is still something Xbox is lacking. It's taking quite a while for the Xbox Game Studios acquisitions to bear fruit.

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Hence a handheld would have served well for small hit games, including backward compatibility with XONE/360, it could have also been a catalyzer for their cloud/online services and a bridge with PC gaming (they own windows), Nintendo is profiting from it since most of their catalog (except for their 1st party) comes from PC ports

That's exactly Valve's strategy with the Steam Deck, they are capitalizing on it, and it seems to be a good idea, that's unfortunate for xbox, maybe for the next gen

The Steam Deck relieves so much pressure on Xbox and Sony. All they have to do is play nice with Proton and they are handheld ready. If the Deck fails, there's no hit to their bottom line. Sony has has fully embraced it with their push to PC.

This coupled with AMD's FSR 2/2.1 I'd argue. FSR can dramatically lower energy requirements while still maintaining acceptable image quality, and is critical for most of the Sony games to run at reasonable frame rates on the Deck.

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