Xbox Ally X market response "extremely positive," as ASUS acknowledges stock issues — "We are working closely with suppliers to ramp up production."

The first true OEM gaming Xbox launched this year, named the Xbox Ally.

I exclusively leaked the Xbox Ally a few months ago, codenamed Kennan. It would later be revealed during Xbox's June marketing beats, showcasing a big partnership with Windows OEM ASUS, as part of the firm's ROG gaming line-up.

Powered by AMD's Z2-A and Z2 Extreme, the Xbox Ally range is serving as a test bed of sorts for Microsoft. The Windows flight on the Xbox Ally represents the operating system going into the next-gen Xbox, powered by full-blown Windows.

The experience overall is solid, but a variety of issues remain for the Xbox Ally range from a usability perspective. From a gaming perspective, the Xbox Ally X is currently the most powerful handheld in the world, and provides the best handheld experience for Xbox gaming yet. But, how well is it doing in the real world?

Today during ASUS' investor meeting, the firm revealed that it expects the Ally range to generate between $96 million and $160 million USD this quarter, and eventually settling between $130m and $160 million in future quarters.

Windows PC OEMs generally propagate dozens of hardware SKUs in smaller amounts to target specific sub sections of users and price points. Razer is currently selling three main laptop SKUs as of writing, across a variety of configurations. The ASUS ROG line is no different, with a variety of accessories, PC components, laptop models, and now, PC gaming handhelds to speak of.

ASUS admitted in its investor call that it misjudged demand for the Xbox Ally X top-end model, which starts at $999.

Responding to a question from investment mega bank Morgan Stanley, ASUS described how the Xbox Ally range had exceeded expectations. "As many of you know, we introduced the first generation ROG Ally 2-3 years ago as a market pioneer, over the past couple of years this new category, especially, the Windows ecosystem has proven itself highly successful," ASUS explained.

"We believe that we have achieved our original goals of premium positioning, creating a new growth driver in our gaming segment. That's why we released our third-generation ROG Ally last month. It featured deeper collaboration with Xbox. Since its launch, we see the market response for it has been extremely positive, particularly, there has been an appetite for the premium higher-end models, exceeding our expectations. These high-ended variants are currently in short supply. We are working closely with key component suppliers to ramp up production and fill the demand gap that exists. Our goal with the ROG Ally is for it to remain a core pillar within the ASUS gaming portfolio."

The Xbox Ally is a glimpse into the next-gen Xbox

Xbox Ally / Xbox Ally X Review — From someone who actually uses Xbox. - YouTube

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The Xbox Ally and Xbox Ally X are a glimpse into Microsoft's plans for the next evolution of the Xbox ecosystem. The next Xbox will use full Windows, leveraging the Xbox Ally's Full Screen Experience and Xbox Game Bar as the primary way to interact with the system. Much like the Xbox Ally, Microsoft will also open up the Xbox ecosystem to other OEMs who want to create their own "Xbox" devices, similar to what Steam is doing with Steam OS and the new Steam Machine.

To make the experience truly console-like, Microsoft's Windows and Xbox teams are working more closely than ever before, collaborating towards making the Windows environment more controller-friendly, with boosted multi-tasking and experiences more tailored for living room use.

However, a big question mark hovers over this strategy. Microsoft's attention is heavily divided on Windows, between creating an "agentic AI" experience it hopes will boost its chops with enterprises, while also courting gaming consumers who remain sceptical at best with regards to anything labelled "AI."

The Xbox Ally still has a ton of "PC"-style idiosyncrasies that console gamers don't want. Every time you open a game with any form of online ping, Windows Firewall will complain. Many games have pop-ups of a variety of shapes and sizes, with little to no information on what they actually mean. The full screen experience also often loses focus, requiring you to tap the screen to re-gain control of the window — obviously you won't be able to do that if you're using it with your TV. There are many more issues, but hopefully, these can all be solved relatively easily over time.

There's also the issue of Xbox being more difficult to publish for than other platforms, which excludes the Xbox PC experience native to the Xbox Ally from many AAA and viral indie hits that hit Steam directly. Microsoft is also working to make publishing on Xbox PC more friendly to that end, but will they be able to move fast enough?

Still, it seems that the Xbox Ally has been a hit for ASUS. Could we see other OEMs jump on board in the future? A Razer Xbox? A Lenovo ThinkPad Xbox?! Everything is an Xbox now, apparently. And we should see even more "Xboxes" in the future.

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