Xbox Ally is an Xbox you can hold in your hands, which combines the power of Xbox and the freedom of Windows, says Sarah Bond, CEO of Xbox, during a digital presentation.
The console will be available in two models and they are developed in collaboration with the Taiwanese electronics company Asus.
Bond emphasizes the opportunity to indulge in a variety of different games wherever the player wants to do so.
Microsoft promises to release information about prices and launch dates within the next few months.
The announcement comes just days after the Japanese gaming giant Nintendo released its portable console Switch 2.
It has a larger screen and a more powerful processor than its predecessor Switch.
