Microsoft is currently developing its next-generation gaming hardware, with the Xbox and Windows teams working in close collaboration. This follows reports regarding internal disagreements over the operating system for the upcoming Xbox handheld device.

According to reports from Windows Latest, the Windows division proposed using a streamlined version of Windows Home for the handheld. In contrast, the Xbox team sought to develop a proprietary system to minimize background processes, thereby improving gaming performance and battery life.

Reports suggested that some Xbox executives threatened to cancel the handheld project if the use of Windows was mandatory. However, Xbox CTO Scott Van Vliet clarified on X that the Helix OS project remains built on the Windows platform.

Van Vliet stated that the reports misrepresented both the technical development process and the relationship between the teams. The company noted that Xbox products have long utilized a modified Windows kernel, optimized specifically for gaming interfaces and background operations.