Xbox CTO says Project Helix OS is built on Windows

This is a new development in a story we reported earlier: Microsoft plans Xbox handheld for 2027, Project Helix for 2028.

Xbox CTO Scott Van Vliet said on Oct. 21, 2026 that Project Helix OS is being built on Windows. He said Fortune and Windows Central reporting “misrepresents both the technical work and the relationship between the teams.” Fortune had published a report on Oct. 20, 2026 describing internal clashes between Xbox and Windows teams about the operating system for next-generation Xbox hardware. Windows Central published a follow-up report after Fortune’s piece about the dispute.

Fortune’s report said the Windows and Xbox teams clashed over the operating system for an upcoming handheld seemingly set to launch in 2027, with Xbox wanting to optimize for best gaming performance and the Windows team wanting to use a trimmed-down version of Windows Home. Instant Gaming News reported that Windows teams wanted a pared-down Windows 11 Home while Xbox teams preferred one OS built to make games perform best. Kotaku said tensions grew so severe that a senior Xbox leader threatened to cancel the handheld rather than use the Windows version, based on accounts from people briefed on the dispute. Kotaku reported that Xbox now leads the handheld’s operating system work, and Asha Sharma said the two sides still work together closely, saying the company cannot build Helix on its own.

Windows already powers the current Xbox Series consoles and Xbox One, running a modified version of the OS customized by the Xbox team on top of the Windows OS core developed by the Windows team. The operating systems for the current Xbox Series X and Xbox Series S are also technically built on Windows. The Xbox team plans to maintain the modified-Windows approach with Project Helix consoles and expand it with new features such as running PC games. Windows Central reported that the two teams disagreed over the direction of the platform for certain gaming-specific experiences, but that did not mean they were no longer working together.

Fortune said a portable Xbox device could launch as early as late 2027 and a home console around holiday 2028. Kotaku reported that the planned handheld would be a successor to the existing Xbox Ally X, and IGN noted that Microsoft partnered with Asus to launch that device last year. Kotaku also said the current Xbox Ally X uses a UI layer on top of Windows that is extremely finicky and not as slick, streamlined, or optimized as the Steam Deck. Fortune said Project Helix Xbox consoles could cost as much as $1,800 without subsidies.

Microsoft is developing Project Helix, a next-generation Xbox console believed to meld PC and console gaming, and reports indicate it could play both Windows PC and Xbox console games on one device. Microsoft’s disc-to-digital program sets up user game libraries for the leap to an all-digital future on Helix. In a leaked memo sent to staff and obtained by Windows Central, Xbox CEO Asha Sharma described Project Helix as a family of devices for Gen-10, saying there is not one device that fits all and that Xbox will certainly have a great console first. The current Xbox generation launched with two separate boxes, the Xbox Series X and the cheaper and less powerful Xbox Series S, and Microsoft partnered with Asus last year to launch the ROG Xbox Ally X handheld gaming PC.

The next-generation core console is likely the successor to the Xbox Series X and will be the focus of Xbox’s partnership with AMD. Microsoft expects anything from more handheld gaming PCs to Xbox-branded laptops and desktop PCs, based on its decades of partnering with hardware manufacturers for Windows.

Windows 11 is almost universally the worst part of every handheld gaming PC that uses it, and the Xbox Full Screen Experience has vastly improved over the last year but still has room for improvement. The operating system is starting to look really good, according to Sharma’s memo.

IGN reported that Jez Corden said the leaked memo discussed Xbox PC and Battle.net, noting Blizzard’s launcher nearly matches Steam in keeping users. IGN said that with Xbox now owning Blizzard, more games are expected on Battle.net, though the launcher has an issue where newly added games appear in the favorites bar. Sharma said, “We will do it the right way for those communities,” If Xbox delivers a Windows 11 or 12 experience as easy to use as the Xbox Series X or SteamOS, Project Helix could define the next console generation.

TweakTown said Xbox wants to improve affordability and efficiency by offering more ways to play and buy consoles, including additional pay-as-you-go payment options. TweakTown said Microsoft expanded its pay-as-you-go systems and added a buy-now-pay-later choice, allowing players to pay for a console across 24 months. TweakTown said Microsoft is looking at OEM partners for Project Helix hardware, with ASUS mentioned as a possibility, and is investing more in AI tools and features to make hardware run better at lower cost.